25/11/2020 - 15:08

APA to build $460m gas connection

25/11/2020 - 15:08

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Gas demand in the Goldfields will underpin a new $460 million pipeline connecting Western Australia’s two key gas trunklines.

AGIG started operation of the Fortescue River Gas Pipeline, seen here under construction, in 2015. Photo: AGIG

Gas demand in the Goldfields will underpin a new $460 million pipeline connecting Western Australia’s two key gas trunklines.

APA Group will build a Northern Goldfields Interconnecter by mid-2022, the ASX-listed company said today.

That will run beside the existing Mid West Pipeline, linking the Dampier Bunbury Pipeline and Goldfields Gas Pipeline.

The new 580 kilometre pipeline will deliver 80 terajoules a day into the Goldfields, and will bolster APA’s existing Goldfields Gas Pipeline which the company said was contracted to full capacity, 202tj/d.

It may also provide an opportunity for Perth Basin producers to sign supply deals with new customers in the Goldfields.

APA chief executive Rob Wheals said the company had built an interconnected grid on the east coast already.

“By connecting existing pipelines, our investment decision to build the NGI will not only add capacity to the system but will also increase gas supply options for customers,” Mr Wheals said.

“This will open up new regions for development supporting thousands of jobs both during and post-construction.

“Our investment in the NGI will help stimulate significant economic development in Western Australia and has the potential to unlock hundreds of millions of dollars of investment in the Goldfields region, which is rich in gold, potash and battery minerals such as vanadium, nickel and rare earths.”

APA said gas would support growth of renewables and storage in the electricity sector too.

It comes after a plan to build a $50 million gas liquefaction plant in Mount Magnet, to truck gas into mine sites for power generation, was approved by the state government in early November.

Both the pipeline and plant will provide gas for mine sites.

Strike Energy, which is developing the West Erregulla project in the Perth Basin, said the new pipeline would make onshore Perth Basin assets the closest supply source for the Goldfields.

“APA’s pipeline announcement is a significant endorsement in the potential of the Perth Basin to be a long term, competitive source of energy for the Goldfields,” Mr Nicholls said.

“Gas is the fuel of choice to replace diesel fired electricity in the Goldfields. 

“It is reliable and affordable, has significantly lower emissions, and facilitates high penetration of complimentary renewable energy.

Strike Energy’s market access continues to grow.

“We look forward to engaging further in discussions with potential end users of Perth Basin gas.”

One challenge will be that gas usually runs south on the Dampier Bunbury Pipeline, but would need to head north to move from some assets in the Perth Basin up to the interconnector.

APA also said it would sell its 50 per cent stake in the Mid West Pipeline, where state government owned Horizon Power is coinvestor.

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