APA  Group  (ASX:APA),  Australia’s  largest  natural  gas  infrastructure  business,  has  commenced  a  $90  million  capacity  expansion  of  its  Victorian  and  New  South  Wales  pipeline  systems  to  meet  pipeline  service  requirements  underregulatory  and  contractual  arrangements.    

The  expansion  projects,  which  are  scheduled  to  be  completed  by  winter  2010,  will  provide  increased  gas  transportation  and  storage  capacity  within  and  between  the  two  states.  

The  southern  section  of  the  Moomba  Sydney  Pipeline  system  will  be  expanded  to  provide  additional  storage  services  and  more  flexble  gas  transportation  services,  including  across  the  Victorian‐New  South  Wales  border.  

The  additional  capacity,  which  is  fully  underwritten  by  long‐term  transportation  and  storage  agreements,  will  be  achieved  by  partial  looping  of  the  Young  to  Culcairn  pipeline  with  450  mm  diameter  pipe.  

APA  Managing  Director  Mick  McCormack  said  increasing  demand  for  natural  gas  in  both  New  South  Wales  and  Victoria  highlighted  th  importance  of  APA’s  pipeline  infrastructure  in  transporting  and  storing  this  fuel.    

"The  Moomba  Sydney  Pipeline  is  a  critical  piece  of  Australia’s  natural  gas  infrastructure  and  will  continue  to  be  so,  as  natural  gas  is  used  increasingly  for  electricity  generation,"  he  said.  

Across  the  border,  the  northern  section  of  the  Victorian  Transmission  System  will  be  expanded  to  provide  improved  deliverability  of  gas  for  custoers  in  this  part  of  the  state  and  into  New  South  Wales.   

This  expansion  will  involve:  

• Installation  of  two  new  compressors  at  the  Wollert  Compressor  Station;  

• Pipeline  operating  pressure  up‐rating  of  the  Wollert  to  Euroa  pipeline;  and   

• Installation  of  flow  reversal  capability  at  the  Springhurst  Compressor  Station.  

Mr  McCormack  said:  "APA,  as  owner  of  both  pipeline  systems,  is  able  to  respond  to  the  markets’  requirements  for  additional  natural  gas  pipeline  and  storage  capacity  with  the  best  solutio  for  all  participants.   

"The  expansions  lay  the  basis  for  significantly  increasing  the  movement  of  gas  between  states,  and  providing  the  market  with  increased  flexibility  to  source  and  use  natural  gas."