Australia Gas Pipelines & Distribution Utilities: Data centers driving gas pipeline M&A and increased investor/producer attention, positive for Buy-rated APA

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Australia Gas Pipelines & Distribution Utilities: Data centers driving gas pipeline M&A and increased investor/producer attention, positive for Buy-rated APA

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26 Jul 2026 23:21:06 ET │ 12 pages

Australia Gas Pipelines & Distribution

Utilities

Data centers driving gas pipeline M&A and increased

investor/producer attention, positive for Buy-rated APA Suraj Nebhani, CFA AC

+61-2-8225-4829

suraj.nebhani@citi.com

CITI'S TAKE

Howard Penny

Rising M&A activity in Australian gas pipeline infrastructure signals +61-2-8225-4819

meaningful valuation upside for Buy-rated APA Group. Morgan Stanley's howard.penny@citi.com

acquisition of Epic Energy from QIC for A$1 billion — implying a ~14.5x FY25

EV/EBITDA multiple — is a ~10% premium to APA's current ~13x FY25 Akshit Batra

EV/EBITDA, underscoring that the market is mispricing APA's asset quality, +912242775184

in our view. Compounding the bullish case, Beetaloo Energy's planned 2GW akshit.batra@citi.com

gas-backed data centre complex near Darwin highlights the emerging role

of gas infrastructure in powering Australia's digital economy — a structural

demand tailwind mirroring trends already well-established in the US. We

maintain a non-consensus Buy on APA, with positive momentum heading

into August results.

M&A activity rising with Epic Energy deal — As highlighted in the AFR article

yesterday, Morgan Stanley’s infrastructure investment division has agreed to buy

100% of Epic Energy from QIC for A$1 billion. Epic Energy owns “critical gas pipeline

infrastructure” in South Australia, namely the 1,150 kilometers gas pipeline from

Moomba to Adelaide Pipeline System, which connects gas reserves in central-East

Australia, including the Cooper Basin to southern states. Epic Energy also has