Expanding energy infrastructure owner APA Group has struck an agreement with shale gas explorer Armour Energy to explore the development of up to $2 billion of pipelines that would allow Armour’s gas to be delivered as far south as Sydney.

The NORGAS pipeline system would help move potentially commercial gas that is now stranded in remote areas of the Northern Territory to major markets and would be a significant step toward forming a national gas grid that only excludes Western Australia.