A rare greenfield announcement
SURAT Basin construction project to go in-house
Wednesday 07 September 2016
In one of the first signs of a return to life for the Surat Basin CSG sector, the APA Group has announced it will start building a 50-kilometer pipeline at the cost of around $80 million in 2017.
The new pipeline west of Miles will be bi-directional linking the existing Wallumbilla gas hub with the Australia Pacific LNG (APLNG) pipeline at Reedy Creek.
The Reedy Creek Wallumbilla Pipeline (RCW) will expand APA’S 7,500 kilometre East coast grid providing an important link to the Wallumbilla Gas Hub for APLNG who recently commenced exporting LNG out of Gladstone via it's fully commissioned second gas processing facility.
APA will design, build, own and operate the pipeline, and as part of the project, APA will also construct the associated connection and compression facilities.
APA will receive income from the new pipeline via a 20-year contract with APLNG to provide a bi-directional service of up to 300 TeraJoules a day.
APA Group Managing Director, Mr Mick McCormack said the new pipeline is a sign of growth.
"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,” he said.
"APA continues to pursue a growth strategy, and the RCWP project is one of a number of growth opportunities ahead of us."
APA still has to work through the required pipeline development approvals and access arrangements but hopes to commence construction in 2017, with the pipeline expected to be operational midway through 2018.