APA commits to $290m gas expansion project
The company announced it had reached a Final Investment Decision (FID) on the project to expand transportation capacity by about 25 per cent.
APA also announced a significant new East Coast Grid gas transportation agreement with Origin Energy.
APA chief executive officer and managing director Rob Wheals said the FID reflected the changing dynamics of east coast gas supply, current contracted positions, ongoing customer discussions and the key role that Queensland gas production would play in delivering energy security.
“Through the investments we’re making today in the staged 25 per cent expansion of the East Coast Grid, APA is playing a critical role in delivering additional energy security for southern gas markets ahead of forecast supply risks,” he said.
“Today’s announcements reinforce the competitiveness of APA’s East Coast Grid and the critical role it plays in delivering for our customers and for the economy through cost-effective, safe and reliable transportation of Australian domestic gas from northern gas producers to southern markets.”
The infrastructure expansion will be delivered in two stages, with the first stage increasing Wallumbilla to Wilton capacity by 12 per cent.
That stage is targeted for commissioning in the first quarter of 2023, ahead of forecast southern state winter supply risks identified in the 2021 AEMO Gas Statement Of Opportunities.
APA said Stage 2 of the expansion works, adding a further 13 per cent of capacity, would be staged to meet customer demand (currently targeted for commissioning towards the end of 2023).
Engineering and design works continue on a potential third stage expansion of the East Coast Grid to add a further 25 per cent transportation capacity.
APA’s new three-year agreement with Origin Energy will commence on January 1, 2023 and has the potential to see that supplier meet more than half of NSW’s winter demand.
Total incremental revenue over the initial three-year GTA is around $190 million, with the option of a further two-year extension.
APA said it would deliver a portfolio of flexible services on the East Coast Grid, including on the Moomba Sydney Pipeline (MSP) and the South West Queensland Pipeline (SWQP).
Origin turns to Australia Pacific LNG for more gas
In addition to the agreement with APA Group, Origin Energy has secured a four-year supply agreement with Australia Pacific LNG for up to an additional 91 PJ of gas from January 2022.
Origin executive general manager energy supply and operations Greg Jarvis said the company had taken a major step towards securing gas supply for domestic customers, particularly in southern states, through a period in which AEMO had identified a potential shortfall for the market.
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