APA to expand Australian East Coast Grid
Australian gas infrastructure company APA Group May 5 announced it had reached a final investment decision (FID) to expand the East Coast Grid, linking Queensland with southern markets, by approximately 25%.
APA said it had reached FID on the project due to strong customer demand for transportation capacity, taken together with existing contracted positions and available capacity, and “set in the dynamic market context of forecast winter gas supply risks from 2023”.
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The expansion will be delivered in two stages and at a capital investment of around A$270mn ($209mn), APA said. It will increase the winter peak capacity of the East Coast Grid by 25% through additional compression and associated works on both the Moomba Sydney Pipeline (MSP) and the South West Queensland Pipeline (SWQP). The SWQP and the MSP are the key pathways for the delivery of gas from Queensland and the Northern Territory, to southern markets.
The first stage of expansion works will increase Wallumbilla to Wilton capacity by 12% and 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. Stage two of the expansion works, which will add a further 13% of capacity, will be staged to meet customer demand and is currently targeted for commissioning towards the end of 2023, APA said.
Meanwhile, APA also announced a new East Coast Grid gas transportation agreement with Origin Energy. APA’s new three-year deal with Origin will start on January 1, 2023, and will support Origin’s energy needs in the southern markets, including winter peak demand and ahead of projected potential 2023 supply risks, APA said.
Under this agreement, Origin could meet over half of New South Wales’ winter demand. Total incremental revenue over the initial three-year agreement is around A$190mn, with the option of a further two-year extension.