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Highlights
- AER rejects APA Group’s proposal to regulate Basslink.
- Basslink will continue operating in the open market.
- APA Group expands with new pipeline agreements in Northern Territory.
The Australian Energy Regulator (AER) has denied APA Group’s (ASX:APA) application to convert its Basslink interconnector into a regulated asset. Basslink, which connects Victoria and Tasmania’s electricity markets, was acquired by APA Group in 2022 for $773 million. The group aimed to integrate Basslink into the national electricity grid to improve network returns.
The regulator’s draft decision stated that while there may be potential future benefits, the certainty of cost and risk transfer to consumers outweighs those benefits under current scenarios. AER highlighted that this conversion is unlikely to align with the National Electricity Objective at present. APA Group’s (APA) share price reacted slightly, trading down nearly 1% at $7.22 on the ASX following the announcement.
APA Group acknowledged the AER’s preliminary decision and stated that if it remains unchanged in the final ruling, the company will continue to operate Basslink as a non-contracted market network service provider. Under this arrangement, capacity will be traded in the spot market. Basslink maintains an active contract with Hydro Tasmania, a state-owned generator, until June 2025.
Meanwhile, APA Group (APA) is advancing its infrastructure footprint in Australia’s energy market. The company has partnered with Tamboran Resources (ASX:TBN) and Daly Waters Energy to develop the 37-kilometre Sturt Plateau Pipeline in the Northern Territory. This pipeline will connect the Sturt Plateau gas Compression Facility to the existing Amadeus Gas Pipeline.
Under the agreement, both Tamboran Resources (TBN) and Daly Waters Energy have committed to utilizing all foundational capacity in the new pipeline. The contracts ensure steady capacity usage until at least 2041, reflecting strong energy demand in the region.
The Sturt Plateau Pipeline project underscores APA Group’s ongoing efforts to strengthen its gas transmission capabilities across Australia while addressing growing infrastructure needs.
While AER’s decision on Basslink introduces operational adjustments, APA Group (APA) remains focused on expanding its services, as reflected in the new Northern Territory pipeline agreements.
