APA to expand compression capacity at Wallumbilla hub, Queensland
APA Group (ASX:APA), Australia’s largest natural gas infrastructure business, today announced it will proceed with the development of expanded compression capacity and associated services at the Wallumbilla gas hub, Queensland. Commercial agreements between Epic Energy Queensland Pty Limited (Epic) and GLNG Operations Pty Ltd (GLNG) will underpin the capital investment of up to $200 million over the next two years.
The Wallumbilla gas hub is connected to all major gas pipelines that flow into and out of Wallumbilla, including APA’s Roma Brisbane Pipeline and the South West Queensland Pipeline, which has been acquired by APA as part of the acquisition of Hastings Diversified Utilities Fund (ASX:HDF). Accordingly, it is well placed to provide gas transportation and compression services for customers in south east Queensland.
The capital works will increase compression capacity at the hub and provide the option for further compression services in the future. Design and procurement activities have commenced, with the compression and associated services to be available at the start of 2015.
The additional compression capacity and services which will be available as a result of the capital works have been contracted with GLNG under a 15-year agreement, with a further 5 to 10 year option.
Epic is an entity wholly owned by HDF. APA currently owns 98.56% of HDF and has commenced compulsory acquisition procedures in relation to the remaining HDF securities.