APA Group has committed a further $700 million to the Bulloo Interlink Pipeline after securing a five-year, take-or-pay agreement with Origin Energy. The 800 TJ/day project is aimed at easing projected north-to-south gas constraints, with construction targeted for early 2027 and operations for winter 2029.
- $700 million final investment decision for the Bulloo Interlink Pipeline
- Five-year, inflation-linked, take-or-pay agreement signed with Origin Energy
- 800 TJ/day pipeline to link Queensland and New South Wales
- Construction targeted for early 2027, with commissioning planned for winter 2029
- APA says total Stage 3 works will lift north-to-south capacity by about 30%
Origin Agreement Supports $700 Million Pipeline Decision
APA Group (ASX:APA) has put $700 million behind a new gas transmission link between Queensland and New South Wales, backed by a five-year transport and storage agreement with Origin Energy. The deal is take-or-pay and inflation-linked, giving APA a firm revenue commitment for services across its east coast network, although the announcement does not disclose its total value or pricing.
The Bulloo Interlink Pipeline will form Stage 3B of APA’s East Coast Gas Grid expansion. It will connect the South West Queensland Pipeline with the Moomba to Sydney Pipeline and carry up to 800 terajoules of gas a day. APA had already committed $220 million to early works in February, taking the disclosed investment in the project to $920 million.
The project sits within APA’s roughly $3.5 billion organic growth pipeline and will be funded from existing balance sheet capacity. The company says it expects returns above its hurdle rates, while also stating that the expansion is not expected to alter its standing inflation-linked tariffs on key transport routes.
Stage 3 Targets Southern Market Constraints
APA says the broader Stage 3 program is designed to add about 30% to north-to-south gas transport capacity when complete. Together with earlier projects, the company expects its East Coast Gas Grid capacity in that direction to be more than 50% higher than in 2023. The expansion was among the major investments identified in APA’s East Coast Gas Grid expansion plans during its FY26 update, although today’s announcement provides the clearest capital commitment for the Bulloo stage.
Origin’s new services will cover summer and winter capacity on the South West Queensland, Moomba to Sydney and Roma to Brisbane pipelines, as well as the Bulloo link once commissioned. The new arrangements are due to begin when Origin’s existing arrangements conclude on 1 January 2028. APA said engagement with other customers also gave it confidence that demand for the project was strong.
Chief executive Adam Watson said the pipeline was intended to prevent transport capacity becoming a constraint on projected gas demand in Australia’s southern states later this decade and into the early 2030s. He cited the Australian Energy Market Operator’s 2026 Gas Statement of Opportunities, which said unlocking northern gas supply and expanding pipelines could push projected southern-market shortfalls into the 2030s. Those projections are market-wide and include APA and other pipeline expansions, rather than measuring the Bulloo project in isolation.
Approvals and Construction Milestones Remain
Construction is scheduled to begin in early 2027, subject to relevant approvals. APA is continuing environmental approvals, detailed design, corridor assessment, procurement and stakeholder engagement, with commercial operation targeted for winter 2029. Revenue is expected to ramp over about five years after commissioning, while the project is also expected to reduce long-term stay-in-business capital expenditure on the Moomba to Sydney Pipeline.
Stage 3A remains targeted for winter 2028, with procurement, contractor agreements and site works already under way. The key test now is execution: the filing provides a committed capital figure and an anchor customer, but not the project’s detailed cost breakdown, return metrics or the outcome of the remaining approvals.
Bottom Line?
APA has secured an anchor customer before construction, but the investment case still depends on approvals, cost control and delivery against the winter 2029 commissioning target.
Questions in the middle?
- Will the Bulloo project receive all relevant approvals in time for early 2027 construction?
- How will construction costs and the five-year Origin agreement translate into realised project returns?
- Can Stage 3A and Stage 3B be delivered on schedule as APA expands east coast capacity simultaneously?