APA Group invests $75m into new infrastructure to protect Victoria against gas shortfalls

The nation’s largest gas pipeline operator APA Group will pump $75m into expanding its infrastructure in Victoria in an effort to ward off future shortages.

Victoria’s looming gas shortage has had the pressure valve released slightly, with Australia’s biggest gas pipeline operator committing to pumping $75 million into new infrastructure to buffer the state against future shortfalls.

The investment is being made as part of a new five-year expansion plan for the east coast unveiled by APA Group.

It will boost the group’s capacity to carry Liquefied Natural Gas (LNG) to southern and eastern cities by 24 per cent.

It comes despite the Allan government’s plan to phase out reliance on gas and promote electrification of the network to meet a target of creating net zero emissions by 2045.

Adam Watson, Chief Executive Officer at APA Group, has said gas is an essential part of the energy mix. Picture: Supplied

APA Group chief Adam Watson said the company was ploughing ahead with infrastructure improvements because gas is an essential part of the energy mix and consumers needed more certainty.

“These are critical projects in the national interest to help secure Australia’s energy future and support a more affordable and lower emissions energy system,” he said on Monday.

“Australia will need gas out to 2050 and beyond as a critical backup to renewables and to support many of Australia’s key manufacturing and industrial sectors.”

Last year the Victorian government was criticised after unveiling its gas substitution road map, which was created to wean Victoria off gas.

The road map has been slammed by the community and gas players amid warnings upfront charges for electrifying Victorian homes “could be a challenge for some households,” with upfront costs ranging from $2700 to $4700.

In February, Woodside Energy chief executive Meg O’Neill sparked a debate over the state’s energy future when she told the Melbourne Mining Club that, given the inactivity on protecting gas, it could be too late to avoid gas deficits in coming years.

APA Groups gas pipeline facility in Western Australia. Picture: APA Group

The Australian Energy Market Operator has predicted minor gas shortfalls this year and more significant deficits — where demand outstrips supply on extreme or “peak” days — from 2027.

Energy Users’ Association of Australia chief Andrew Richards welcomed APA’s new investment, saying the ability to move gas around the state more efficiently was a win for industry and consumers.

“Australia has plenty of gas, it’s just not always where you need it to be so this expansion of pipeline capacity and southern storage will be a critical part of a broader east coast gas strategy to deliver affordable and reliable gas supply,” he said.

“Increasing domestic gas supplies in southern states by up to 24 per cent is good news for local industries, which will provide more options for Australian manufacturers and better outcomes for all Australians who rely on their products.”

Victorian Energy Minister Lily D’Ambrosio has previously said gas was an important part of the government’s ­energy transition plan. However, she warned that “supply is dwindling and prices are going up” and that electrification of new homes and businesses was the future.

Originally published as APA Group invests $75m into new infrastructure to protect Victoria against gas shortfalls