APA Group has made a final investment decision (FID) to construct the Kurri Kurri Lateral Pipeline in New South Wales (NSW), Australia, which entails an investment of approximately A$450m ($289.3m).

According to the Australian energy infrastructure business, the proposed 20km long gas transmission pipeline and 70TJ gas storage facility will cater to Snowy Hydro’s Hunter Power Project in Kurri Kurri.

The Kurri Kurri Lateral Pipeline will connect up to 750MW gas-fired power station to the existing Sydney to Newcastle Pipeline.

In June 2022, APA Group entered into a 30-year gas transportation and storage agreement with Snowy Hydro, with the possibility of extending it for an additional 10 years.

As part of the agreement, APA Group will be responsible for constructing, owning, and operating the Kurri Kurri Lateral Pipeline.

APA Group CEO and managing director Adam Watson said: “Through investments like the Kurri Kurri Lateral Pipeline, APA is focused on ensuring that the lights stay on across Australia – at our schools, our hospitals, in our homes and to support industry – in the most efficient, sustainable way, while we keep driving towards a renewable dominated future.

“Natural gas and projects like the Hunter Power Project will be essential for delivering energy security and ensuring we meet our energy targets in an affordable, fair, reliable and sustainable way.”

In September 2023, the Kurri Kurri Lateral Pipeline secured its licence from the NSW government.

With the recent initiation of preliminary work, major construction is now set to commence, as all third-party approvals and development matters have been finalised and agreed upon with Snowy Hydro.

The progress in the project follows the completion of detailed engineering and design, along with the necessary approvals.

Approximately A$120m ($77m) of the total capital expenditure was allocated during the fiscal year 2023, primarily for the procurement of essential project materials.

APA Group has engaged principal construction contractors under predominantly fixed-cost arrangements. The company said that the project remains on track to meet the timeline for the completion of the Hunter Power Project.

The pipeline will incorporate electric compressors to minimise its operational emissions.

The energy infrastructure company anticipates that construction employment will reach its peak, with nearly 400 workers involved when the construction of the pipeline connection, storage facilities, and compressor station activities overlap.