Ethane Pipeline Income Fund : Clarification of Guidance

ASX RELEASE 23 August 2012
The Manager
ASX Market Announcements
Australian Securities Exchange
4th Floor, 20 Bridge Street
Sydney NSW 2000

Electronic Lodgement

Dear Sir or Madam

Company Announcement

I attach the following announcement for release to the market:

• Clarification of Guidance

Yours sincerely

Mark Knapman Company Secretary APA Ethane Limited

ASX RELEASE 23 August 2012

Clarification of Guidance

The Board of APA Ethane Limited seeks to provide clarification to the market on guidance provided with the annual results to 30 June 2012 and quarterly distribution declaration for the period ended 30 September 2012 for Ethane Pipeline Income Fund ("Fund").

Distribution guidance

With the announcement of the annual results to 30 June 2012 ("FY2012") the Board of APA Ethane Limited provided guidance on quarterly distributions for the financial year ended 30 June 2013 ("FY2013") of 4.0 to 4.5 cents per security. This is inclusive of franking credits. It is currently anticipated that franking credits will be available and form part of the distribution from the March 2013 quarter.
From the March 2013 quarter, those distributions declared out of Ethane Pipeline Income Trust ("EPIT") are expected to make up approximately 80% of the cash distributed and will be fully franked (i.e. a franking rate of 100%), while the remaining cash distributed will be from Ethane Pipeline Income Financing Trust ("EPIFT") in the form of unfranked income trust distributions.
Items which impact on the distribution guidance, compared to the prior period, are:
- On repayment of the Investec facility the Fund is no longer required to make the principal and interest repayments ($14.6m over FY2012);
- Cash not available for use in day-to-day operations, specifically those held in the
CapEx Reserve account and on deposit as security over the current working capital facility, were released ($8.7m over FY2012);
- Funds for major known future CapEx and OpEx items are being quarantined
from distributions in FY13 ($3.5m); and
- The Fund will commence paying tax in FY2013. This will result in tax payable for income derived during FY2012 of $2.6m.

Funds quarantined for major OpEx and CapEx projects

Following repayment of the Investec facility, the Fund is no longer required to maintain and contribute to the CapEx Reserve Account. However, the Fund has commenced quarantining funds required for major OpEx and CapEx projects scheduled to occur within the next 3 to 5 years. These projects include the Fund's share of mine subsidence monitoring over FY2013 and FY2014 and magnetic flux leakage pigging scheduled to occur during FY2017. Provisioning in FY2013 is expected to be in the order of $3.5 million.

Revised volumes received from Qenos Pty Limited ("Qenos")

In August 2012, Qenos advised the Fund of revised forecast throughput volumes to December 2014. This is expected to have a minimal impact on FY2013 revenues, due to revenues under the Product Transportation Agreement ("PTA") being principally based on a fixed 'reservation' charge to September 2013. The impact on FY2014 revenues is expected to be a reduction of $2.0 million, compared to prior forecast volumes. This reflects lower annual volume forecasts as well as a reduction

ASX RELEASE 23 August 2012
in volume for a major plant maintenance shutdown currently scheduled for
2QFY2014, for 4 to 6 weeks.

For further information please contact

Amanda Keenan, Investor Relations

Tel: [phone]

Email: [e-mail]

Sam Pearce, Fund Manager

Tel: [phone]

Email: [e-mail]

About the Ethane Pipeline Income Fund

The Fund's core asset is the 1,375km Moomba to Sydney Ethane Pipeline that supplies ethane from the

Cooper Basin production facility at Moomba, South Australia to Qenos' Botany ethylene plant.