Dec 1 (Reuters) - Australia's APA Group (APA.AX) , opens new tab agreed to build state-owned CS Energy's proposed 400-megawatt Brigalow peaking power station in Queensland, it said on Monday.

This represents the first major GPG (gas-powered generation) investment by APA for some time, according to an RBC Capital Markets research note.

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The plant, slated to start operations in 2028 next to CS Energy’s Kogan Creek facility, is designed to provide firming supply during periods of high demand and intermittent renewable output.

APA will provide early funding and is ultimately expected to acquire 80% of the project by mid-2026, while CS Energy will retain a 20% stake and operate the plant.

RBC Capital Markets analyst Gordon Ramsay called the ownership split "somewhat unusual" given APA’s majority interest and expects project delivery risk to be low.

APA CEO and Managing Director Adam Watson said, "This project builds on APA’s existing capabilities and assets in Queensland, driving momentum in our GPG growth strategy and complementing our separate agreement with CS Energy to deliver the project’s lateral pipeline."

Gross project cost is expected at around A$1 billion ($654.40 million), with APA’s net share at roughly A$800 million, RBC Capital Markets estimated. The company intends to fund the investment from existing balance sheet capacity, forming part of its A$2.1 billion organic growth pipeline.

APA did not give out a capital expenditure estimate.

Final capital expenditure will be subject to detailed engineering design, which is expected to be completed in the first half of calendar year 2026, the company said.

($1 = 1.5281 Australian dollars)

https://www.reuters.com/business/energy/australias-apa-partners-with-queensland-build-brigalow-power-station-2025-12-01/