Australia’s APA to expand gas pipeline network

Australian gas pipeline operator APA will progress works to expand capacity on its gas network in the eastern states, increasing transmission between Australia's gas-rich northeast and relatively poorer southeast, where shortfalls are expected later this decade.

Stage 3 of the East Coast Gas Grid (ECGG) expansion will go ahead, APA said in its results for the half-year to 31 December 2025 on 19 February, with A$480mn ($339mn) to go towards new compressors boosting capacity ahead of the 2028 winter months.

The plan was first funded a year ago when A$35mn was earmarked for early works on stages 3, 4 and 5 of the ECGG expansion.

Under ECGG expansion 3A, APA will build new compressors and undertake debottlenecking works on the 512 TJ/d (13.7mn m³/d) South West Queensland pipeline (SWQP) and the 590 TJ/d Moomba-Sydney pipeline (MSP).

Capacity on the SWQP will rise by about 58 TJ/d, MSP by around 10 TJ/d and APA will deliver an expansion increasing the Young-Culcairn section's lateral capacity by about 39 TJ/d.

A further A$220mn will be spent on ECGG 3B to buy pipe and progress a works programme for the proposed 340km, 800 TJ/d Bulloo Interlink, connecting the SWQP and the MSP between Queensland and New South Wales. The project is estimated to cost a total of A$800mn.

But a final investment decision for ECGG 3B will depend on policy settings, Canberra's final response to the Gas Market Review and board approval.

The projects align with identified market needs, APA said, and also support a necessary increase in gas-fired power generation to support the energy transitions.

LNG vs pipeline

The company's ambition to pipe more gas southwards may conflict with plans for LNG imports in southern Australia from next year. There are three proposed terminals, plus the Port Kembla Energy Terminal built by Squadron Energy aiming to bridge the identified gap in supply via seaborne imports.

APA modelling shows gas delivered from Queensland into southern markets is "materially below the cost of imported LNG," the firm said, proposing that expanding pipelines and increasing northern Australia's output is a better solution than importing LNG.

Argus' Gladstone fob price, an LNG netback indicator calculated by subtracting freight and costs associated with production from the delivered price of LNG to Asia-Pacific, was A$13.65/GJ ($10.25/mn Btu) on 12 February, lower from A$24.46/GJ a year earlier.

The AVX, the Argus assessment for month-ahead spot gas deliveries to Victoria, stood at A$11.367/GJ, down by about A$0.07/GJ on the week.

Other companies are investing in projects designed to offset the predicted shortfall in southern states, particularly in Victoria where gas exploration spending rose by more than five-fold on the year in July-September 2025.

Australian utility Origin this month pledged a further A$25mn for a planned gas storage facility in Victoria

APA's revenue for July-December totalled A$1.614bn, slightly down from A$1.621bn over July-December 2024. Underlying net profit after tax was A$126mn, up from A$122mn a year earlier.

By Tom Major