APA Group has announced a $700 million investment to construct a new gas pipeline linking Queensland to New South Wales, aiming to enhance the transportation of gas to southern markets. The project, known as the Bulloo Interlink Pipeline, is expected to be operational by winter 2029 and will increase APA’s north-to-south gas transport capacity by approximately 30 percent.

The pipeline will have the capacity to transport up to 800 terajoules of gas per day, connecting APA’s South West Queensland pipeline with its Moomba to Sydney pipeline. This development forms part of broader expansion plans and is supported by a five-year gas transportation and storage agreement with Origin Energy. The contract includes commitments for both summer and winter pipeline capacity, covering services that will commence on January 1, 2028.

APA chief executive Adam Watson indicated that while the pipeline had been in planning for some time, recent policy developments and customer discussions strengthened the company’s confidence to proceed. He highlighted the declining gas production from the Bass Strait and noted that future supply growth would increasingly rely on northern basins such as Queensland and the Northern Territory. Although the new infrastructure could facilitate gas supplies from the Beetaloo Basin in the Northern Territory, Watson emphasized that the investment was not contingent upon development in that region.

The announcement comes amid ongoing debate over the Australian Labor government’s proposed domestic gas reservation scheme, designed to ensure a portion of gas produced is reserved for domestic consumption. The policy aims to improve local supply but has drawn concern from producers who argue that imposing export restrictions could depress prices and reduce incentives for exploration and development of new gas reserves.

Watson stressed the importance of maintaining a balance between delivering affordable gas prices to consumers and preserving sufficient incentives for producers to invest in new supply infrastructure. He cautioned that prices set too low might discourage production, which could ultimately jeopardize long-term supply security. Watson also noted that the government was receptive to industry feedback, including concerns over potential ministerial interventions under the reservation scheme.

While APA acknowledged that the reservation scheme itself did not drive the investment decision, Watson said that having policy certainty was a critical factor in committing to the pipeline project. "There was not a snowflake’s chance in hell that we were going to be building something if we didn’t have a level of policy certainty," he remarked, underscoring the need for stable policy frameworks to support long-term energy investments.