APA Group has reached final investment decision on the Bulloo Interlink Pipeline, committing $700 million to construction and commissioning of the asset. The project represents Stage 3B of APA’s East Coast Gas Grid expansion and will link the South West Queensland Pipeline to the Moomba to Sydney Pipeline with an 800 terajoule per day maximum capacity. This decision follows $220 million in early works spending committed in February 2026, bringing total development investment to $920 million to date.
The BIL forms part of APA’s broader Stage 3 expansion works, which collectively will deliver approximately 30 percent more north-to-south gas transport capacity when completed. Stage 3 as a whole will increase the company’s north-to-south transport capacity by more than 50 percent since 2023, positioning APA to address projected gas supply constraints on Australia’s east coast later this decade. The company views this as critical infrastructure, with CEO Adam Watson citing AEMO’s 2026 Gas Statement of Opportunities in saying capacity needs to expand to unlock northern gas reserves and meet projected demand in southern states.
A five-year agreement with Origin Energy provides important revenue visibility for the project. The take-or-pay, inflation-linked transport and storage contract covers summer and winter capacity on key APA assets including the South West Queensland Pipeline, Moomba to Sydney Pipeline, Roma to Brisbane Pipeline, and the new BIL once operational. The agreement commences 1 January 2028, providing contracted cash flows that support the investment case. Management states this agreement, combined with strong engagement with other customers, demonstrates firm demand for the new capacity.
The BIL is part of APA’s $3.5 billion organic growth pipeline and is expected to deliver returns above the company’s hurdle rates. APA notes the expansion will be funded from existing balance sheet capacity, avoiding the need for additional equity issuance. The company expects the BIL to reduce long-term stay-in-business capital expenditure required on the Moomba to Sydney Pipeline, offsetting some of the expansion capex over time. Revenues are anticipated to ramp over approximately five years post-commissioning, reflecting gradual demand ramp.
Construction is scheduled to commence in early 2027, subject to relevant approvals, with targeted commercial operation in winter 2029. APA is progressing environmental approvals, detailed design, corridor assessment, and procurement. Stage 3A, a companion expansion project, remains on track for winter 2028 delivery. Investors should monitor approval timelines and any updates on customer demand or competitive developments in east coast gas supply. The announcement is price sensitive and has been flagged as material by the ASX.
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About APA Group (ASX: APA)
APA Group is an Australian energy infrastructure company that owns and operates one of Australia’s largest natural gas pipeline networks, transporting approximately half of the country’s domestic gas supply. The company also owns and operates electricity transmission assets including interconnectors and power generation facilities comprising wind farms, solar installations, and gas-fired power stations. APA Group plays a critical role in Australia’s energy transition, expanding into renewable energy generation as part of the country’s net zero emissions objectives.
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