APA Group has made a deal with a subsidiary of Santos for the development of a new 450km pipeline from Santos’ proposed Narrabi Gas Project in New South Wales to the existing APA-owned East Coast Grid.

The Western Slopes Pipeline (WSP) will connect to the existing APA-owned East Coast Grid through the Moomba Sydney Pipeline at the Bundure mainline valve station, about 100km west of Condobolin.

APA will build and own the pipeline, at a total construction cost of around $500 million, subject to various approvals including a Final Investment Decision by Santos of the Narrabri Gas Project and execution of an agreed form gas transportation agreement.

APA Group CEO and Managing Director, Mick McCormack said, “This agreement is another example of APA developing pipelines to connect new sources of natural gas with Australian markets.

“This is an important agreement in terms of its potential to significantly increase the supply of natural gas to the eastern Australian market in the medium to long-term, particularly for New South Wales.”

APA will soon begin a comprehensive regulatory approval process with the submission of a Preliminary Environmental Assessment (PEA) to the NSW Department of Planning and Environment.

The PEA will include details of a proposed pipeline corridor, located west of the existing Central West Pipeline, which preliminary studies identified as the most suitable for construction.

A range of factors were taken into account when selecting the proposed pipeline corridor, including environmentally sensitive areas, the complexity of terrain, the number of land parcels and landowners along the proposed pipeline route, and current and future land use considerations.

Further steps in the design and construction of the WSP are subject to a series of staged regulatory approval requirements that will be informed by extensive landholder and community consultation, detailed environmental studies and public comment.

The Australian Petroleum Production and Exploration Association (APPEA) welcomed the news of the new pipeline as well as the announcement of Santos’ submission of a development application and Environmental Impact Statement (EIS) for the Narrabi Gas Project to the New South Wales Government .

APPEA CEO, Dr Malcolm Roberts, said, “The EIS is a comprehensive study, drawing on the latest and most complete data and research.

“It includes, for example, detailed local environmental surveys and groundwater impact assessments. The statement finds that the project presents minimal, manageable risk to the environment.

“Without prejudging the outcome of the regulatory process – which will be exhaustive – there can be no doubt Santos has produced a high quality assessment which addresses all potential issues.”

Dr Roberts said the submissions come at a good time, as gas users on the east coast urgently need new supply to be brought into the market.

“The east coast faces a supply shortfall as early as 2019. Unless new projects are developed quickly, customers will face higher prices and tighter supply,” Dr Roberts said.

“This will not only mean higher energy bills for families but also more pressure on manufacturers using gas to make products such as fertilisers, glass and plastics. In NSW alone, these industries employ more than 300,000 people.

“The need for more supply is more pressing in NSW than in any other state.

“Customers already pay a premium for buying 95 per cent of their gas from distant fields in Queensland, South Australia and offshore Victoria. That dependence is costly and risky.  Local supply will mean downward pressure on prices and greater energy security.”

Lauren Cella

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