APA Group (ASX:APA) has announced a comprehensive five-year East Coast Gas Grid (ECGG) Expansion Plan aimed at significantly boosting north-to-south gas transport capacity and enhancing southern markets storage.
The plan, unveiled on February 24, 2025, is set to deliver a 24 per cent increase in transport capacity and introduce new storage facilities to meet the growing East Coast gas demand and support new gas-powered generation.
The expansion plan builds upon APA’s previous $700 million investment over the past four years, which has already added approximately 25 per cent capacity to the grid.
The initial phase of the new plan involves a $75 million investment over the next two years, with $40 million allocated to two immediate enhancements that have reached final investment decision (FID).
The first of these enhancements is the Moomba to Sydney Ethane Pipeline (MSEP) conversion project, scheduled for completion in 2025.
APA will invest $25 million to provide an additional 20 TJ/day from Moomba to Victoria or 25 TJ/day to Sydney.
This conversion will increase the total southbound capacity from Moomba to Sydney from 565 TJ/day to 590 TJ/day.
The second immediate project is the MSP off-peak capacity expansion, which will see the installation of two pressure regulation skids to increase capacity during the summer months.
This $15 million investment will bring new capacity online in the summers of 2025 and 2026, adding 80-120 TJ/day of total new MSP summer capacity.
The remaining $35 million will fund early works on Stages 3, 4, and 5 of the plan, focusing on further expansion and storage projects.
These stages include:
- Stage 3: Expansion to increase gas movement between northern basins and southern markets by 24 per cent, including the proposed 380-kilometres Bulloo Interlink pipeline.
- Stage 4: New southern market gas storage to support peaking gas-powered generation, including the proposed Riverina Storage Pipeline in New South Wales.
- Stage 5: Capacity upgrades to the Victorian Transmission System, potentially increasing transport capacity to Wollert, Victoria by 84 per cent.
APA Group CEO and Managing Director Adam Watson emphasised the critical nature of these projects for Australia’s energy future.
“These investments will help the Australian economy avoid the disastrous option of importing higher cost, higher emissions LNG, which will undermine domestic energy security and expose Australia’s energy market to global supply chains and prices,” Watson stated.
The expansion plan is designed to address projected market shortfalls forecast by AEMO and the ACCC, ensuring sufficient capacity for domestic gas supply to southern markets until 2032.
The initial investment and early works funding are part of APA’s $1.8 billion development pipeline and will be financed from the company’s existing balance sheet.
The costs and funding arrangements for Stages 3, 4, and 5 will be disclosed once final investment decisions are made, subject to customer support, board approval, and regulatory clearances.
As Australia continues to navigate its energy transition, APA’s East Coast Gas Grid Expansion Plan represents a significant step towards ensuring energy security, supporting renewable integration and maintaining a competitive domestic gas market for years to come.
