APA to deliver pipeline capacity needed to solve projected east coast gas shortfalls

ASX releases

5 min read

Published on

19 February 2026

Share this post

CEO and Managing Director, Adam Watson, on APA's plan to deliver pipeline capacity needed to solve projected east coast gas shortfalls.

APA Group (ASX:APA) today announces progression of Stage 3 of its East Coast Gas Grid (ECGG) Expansion Plan, which is expected to add approximately 30% additional transport capacity and address projected southern market gas shortfalls from 2028.

When Stage 3 is completed,¹ APA will have added more than 50% capacity to the East Coast Gas Grid over the past 5 years, having already increased capacity by approximately 25% via Stages 1 and 2.

The Stage 3 expansion includes:

Final investment decision (FID) on Stage 3A (ECGG 3A), with investment of $260 million to increase north to south capacity, supplying essential Australian gas to southern markets for winter 2028; and
$220 million investment for Stage 3B (ECGG 3B) to enable continued early works and procurement of long lead items for the Bulloo Interlink, including purchase of 342km of line pipe and further pre-FID works to deliver additional capacity beyond winter 2028. FID will be subject to certain considerations, including policy settings, progress with the Federal Government’s Gas Market Review and final Board approval.

The staged ECGG expansion plan is designed to minimise costs for customers by anticipating demand with a fit for purpose and responsive solution. The success of this approach is evidenced by strong contracting for earlier pipeline expansions already delivered.
Modelling undertaken by APA provides confidence that domestic gas delivered from northern supply markets can be delivered into southern markets at a cost, inclusive of transport, materially below the cost of imported LNG.²

CEO comments

APA CEO and Managing Director Adam Watson said:

“These capacity expansion investments by APA, along with future planned expansions, make it crystal clear that pipeline capacity will not be a constraint to solving projected east coast gas supply shortfalls.³It’s now critical that the Federal Government implements a well-designed gas reservation policy that supports upstream investment and ensures adequate volumes are supplied into the east coast.

“There is no question that between Queensland and the Northern Territory there is enough gas in the ground to support both the domestic market and Asian LNG customers for decades to come.⁴

“The notion that Australia, as one of the three largest LNG exporters in the world, would need to resort to importing LNG when lower cost, lower emissions domestic gas is readily available, simply doesn’t make sense and would represent a massive failure of government policy. The current Federal Government Gas Market Review provides the opportunity to avoid that failure for the long-term.

“Incremental investment in existing pipeline infrastructure is a logical, proven and timely solution to meet domestic gas needs. AEMO’s 2025 Gas Statement of Opportunities clearly states that expansion of existing pipelines, along with unlocking northern supply, would meet forecast gas needs well out into the 2030s without an LNG import terminal.⁵

“When you look at the data, when compared to LNG imports, it’s clear APA’s expansion projects are the most reliable, cost-efficient and lower emissions solution to get Australian gas to where it’s needed.⁶

“The gas demand and supply thematics playing out in the market give APA confidence to progress our East Coast Gas Grid expansion which, in turn, should give Australian consumers, business and industry the confidence that energy prices won’t be at the mercy of global energy markets.

“APA is addressing southern gas market transport bottlenecks and there’s plenty of domestic gas in the ground. The last piece is the introduction of the domestic gas reservation so Australia’s domestic gas market can get back to what it does best – powering Australian homes and driving Australian industry.”

Gas market context

For Australia’s east coast, supply available in the Surat and Bowen basins is expected to offset declining southern supply and, over the long-term, new basins in the Beetaloo and Taroom Trough are expected to further strengthen supply and lower prices for domestic consumers, while ensuring Australia can capture ongoing economic benefits from LNG exports.

Strong ongoing demand for gas is expected to be underpinned by industrial demand and electrification, with gas powered generation supporting the ongoing introduction of renewables into our energy system as coal is retired. We also know there will be significant additional gas demand from AI and data centres.

APA’s ECGG Stage 3 investments are expected to deliver financial returns above APA’s return hurdles.⁷The investments will be funded from APA’s existing balance sheet capacity and form part of APA’s ~$3 billion organic growth pipeline.

¹ Stage 3A has reached FID, Stage 3B remains subject to final board approval.

² Argus Northeast Asian spot price and shipping cost as at 31/07/2025 and APA estimates for tolling charges, costs and long-term firm transport.

³ Stage 3A has reached FID, Stage 3B remains subject to final board approval. AEMO 2025 Gas Statement of Opportunities, page 87, includes both APA and other pipeline expansions.

⁴AEMO, Gas Statement of Opportunities (GSOO) 2025. AEMO’s step change scenario is noted as its ‘most likely’ scenario and hence has been used in APA analysis. There are over 68,000 petajoules of 2P reserves and 2C resources in Eastern Australia, to serve an east coast market that consumes around 500 petajoules of gas each year.

⁵AEMO 2025 Gas Statement of Opportunities, page 87, includes both APA and other pipeline expansions.

⁶ Argus Northeast Asian spot price and shipping cost as at 31/07/2025 and APA estimates for tolling charges, costs and long-term firm transport.

⁷Project returns are developed based on a number of factors, including the relative risk profile of the project.

Download ASX release