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    APA signs 30-year deal for Hunter gas-power project

Summary

APA will construct, own and operate the Hunter power project’s gas pipeline connection to the Sydney -Newcastle pipeline, along with a 70 terajoule gas storage facility.

by: Shardul Sha

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APA signs 30-year deal for Hunter gas-power project

Australian energy infrastructure business APA Group and Snowy Hydro have signed a 30-year gas transport, storage and development agreement for the Hunter gas-fired power project in New South Wales, APA said on June 20.

APA will construct, own and operate the Hunter power project’s gas pipeline connection to the Sydney -Newcastle pipeline, known as the Kurri Kurri Lateral, along with a 70 terajoule gas storage facility. The pipeline is expected to be ready by 2023.

The development is subject to APA obtaining certain third-party approvals for the development and operation of its facilities and various development matters being agreed with Snowy Hydro. Snowy Hydro may extend the agreement for a further 10 years, APA said.

APA’s total construction costs for the project are currently estimated to be around A$264mn ($184mn). Final capital expenditure will be subject to detailed engineering design, which is expected to be completed by late 2022.

APA said it has worked closely with Snowy Hydro to ensure that the Kurri Kurri Lateral will be hydrogen-blend ready, as well as committing to procuring electric drive compressors to minimise the emissions intensity of operations.

Snowy Hydro CEO Paul Broad said the Hunter power project is on track and progressing well, with key milestones including naming CIMIC Group’s UGL as the principal contractor, as well as the signing of a major contract with Mitsubishi Power to deliver the hydrogen-ready open-cycle gas turbines. 

In the 2021-22 budget, the Australian government committed up to A$600mn for Snowy Hydro to construct the Hunter power project. This project, together with EnergyAustralia’s 316 MW Tallawarra B open-cycle gas plant, will help shore up the security, reliability and affordability of electricity for consumers in NSW, the government said in May last year. The project will start generating in time for summer 2023-24 when AGL's coal-fired Liddell power plant closes.