APA Group has reached a final investment decision (FID) to build the Kurri Kurri Lateral Pipeline, connecting the Hunter Power Project to the existing Sydney to Newcastle Pipeline. APA previously executed a 30-year Gas Transportation and Storage Agreement with Snowy Hydro Limited (Snowy Hydro) on 20 June 2022. Snowy Hydro may extend the Gas Transportation and Storage Agreement for a further 10 years.

Under the agreement, APA will build, own and operate the Kurriurri Lateral Pipeline, a gas transmission pipeline approximately 20 km in length and a 70 TJ gas storage facility to service the Hunter Power Project. The NSW Government granted the Pipeline Licence in September 2023. Following the recent commencement of early works, major construction will now start with all third-party approvals and development matters now finalised and agreed with Snowy Hydro, including APA's total capex costs of approximately $450 million.

This follows completion of detailed engineering and design and approvals work. Approximately $120 million of the total capex cost was spent in fiscal23 largely to procure some key project materials. Revenue will be linked to CPI with returns reflecting the long-term nature of the contract with a government owned counterparty.

APA has engaged the principal construction contractors on predominantly fixed cost arrangements and works remain on track to be delivered in time for the completion of the Hunter Power Project timeline. The pipeline will include electric compressors to minimise its operational emissions. APA estimates construction jobs will peak at almost 400 workers when construction of the pipeline connection, storage and compressor station overlaps.