The Australian Energy Regulator (AER) has approved of APA Group’s proposed AU$213 million expansion of Victoria’s South West Pipeline, a project designed to secure the state’s energy supply ahead of projected winter gas shortfalls.
The infrastructure upgrade will see the construction of two new compressor stations at Pirron Yallock and Stonehaven. These stations will enable higher volumes of Victorian gas from the Otway Basin in Port Campbell and Lochard’s Iona Underground Gas Storage facility to be injected directly into the Victorian Transmission System (VTS).
The project specifically targets peak winter demand periods, with the extra capacity slated to come online from 2029.
Following extensive stakeholder engagement, the regulator also greenlit AU$31 million for APA to advance early works on potential future pipeline looping solutions for the South West and Brooklyn-Lara pipelines, preserving flexible long-term expansion options.
APA CEO Adam Watson said the investment provides a highly efficient pathway to bolstering regional energy security.
“Incremental expansion of existing pipeline infrastructure is a proven, simple and efficient way to move more gas where it’s needed,” Watson said.
“The adopted compression solution is cost-effective, almost 40 per cent cheaper than partial looping for the same capacity and approximately 60 per cent cheaper than a full looping solution.”
The project joins APA’s AU$3 billion organic growth pipeline and expands on the company’s prior investments. Over the last four years, APA has poured more than AU$700 million into its East Coast Gas Grid (ECGG), alongside a recent AU$260 million commitment in February 2026 to boost north-to-south capacity by 11 per cent.
Following the AER’s decision, work is scheduled to commence immediately. APA aims to secure the procurement of the necessary compression units by the end of July 2026, while concurrently progressing detailed engineering works, site access, and environmental approvals.
