APA Group will construct a new gas transmission pipeline between its Wallumbilla Hub and the Australia Pacific LNG Pipeline at Reedy Creek in Queensland as part of an expansion to its East Coast Gas Grid.
The Reedy Creek Wallumbilla Pipeline will expand APA’S 7,500 kilometre East Coast Grid by a further 50km, providing a key link to the Wallumbilla Gas Hub for one of the three major LNG projects operating out of Gladstone.
APA will design, build, own and operate the pipeline as well as construct the associated connection and compression facilities.
The total cost of the construction is expected to be about $80 million.
APA has also entered into a 20-year contract with Australia Pacific LNG Marketing to provide a bi-directional service of up to 300 TJ/d on the new pipeline.
APA Group Managing Director Mick McCormack said, “This new greenfield pipeline continues APA’s growth focus with another strategic energy infrastructure asset underwritten by a long-term contract with a highly creditworthy counterparty.
“It is always very pleasing to further our relationships with existing customers and offer additional services and facilities to add value to and enhance their operations.”
Australia Pacific LNG CEO Page Maxson said, “Australia Pacific LNG’s strong reserve position provides flexibility and, given Wallumbilla Hub’s position as a strategic point in the east coast gas market, this new pipeline will provide us the opportunity to participate flexibly and fully in Australia’s dynamic gas market.”
Australia Pacific LNG is the largest producer of natural gas in eastern Australia, currently providing approximately 25 per cent of domestic gas to the east coast market.
“As one of Australia’s main suppliers of domestic gas, Australia Pacific LNG supports the work that the COAG Energy Council, AEMC and AEMO have done in establishing and working with industry to ensure the Hub’s success,” Mr Maxson said.
Following processing of the required pipeline development approvals and access arrangements, APA will commence construction in 2017, with the pipeline expected to be commissioned mid-2018.
“APA continues to pursue a growth strategy, and the RCWP project is one of a number of growth opportunities ahead of us,” Mr McCormack said.