APA Group has opened its 580km pipeline in Western Australia that the country’s largest listed infrastructure company says could unlock the state’s gas market.
The Northern Goldfields Interconnect (NGI) positions APA to capitalise on the surging interest to tap gas supplies from the Perth Basin and hopes to drastically bolster critical minerals production in WA.
WA has abundant supplies of almost all the government’s critical minerals list, including alumina, cobalt, lithium and graphite – much needed amid global efforts to produce batteries and renewable energy projects to wean from fossil fuels.
Without supplies of gas, these critical mineral mines would have to use diesel for their energy needs, which would contribute to Australia’s emissions.
APA chief executive Adam Watson said the NGI would be vital to supporting the long-term growth of the state’s resource sector. “This infrastructure is the missing link in WA’s gas network,” Mr Watson said.
“For years an interconnected gas grid on the east coast market has helped manage supply and demand challenges across key markets. The NGI also demonstrates that we are backing the WA resources sector.
“We are investing ahead of demand, supporting the government’s long-term growth plan in areas like critical minerals and providing confidence to project owners that reliable energy is available to bring new projects to market.” Some of Australia’s most prominent investors, such as Gina Rinehart and Kerry Stokes, have sought exposure to the Perth Basin amid expectations that the domestic gas market will tighten in the coming years.
WA’s vaunted domestic gas reservation policy bans exports from onshore projects and requires big offshore players to place 15 per cent of their gas into the local market. The reserve has been credited with keeping WA gas prices for big industrial users at levels far lower than for their east coast counterparts. But in recent months, WA has suffered a spate of coal power station outages and an uptick in demand.
With coal playing a smaller part of electricity generation, the Australian Energy Market Operator said this week a total of 100PJ of gas was consumed in the WA domestic gas market in the 2023 second quarter, a drastic increase from the previous three months, when just 7.6PJ was consumed.
AEMO said as a result the average wholesale electricity price in WA during the three months to June 30 had hit a record high. The reporter travelled as a guest of APA Group
