Tamboran Resources, APA Group Partner on Gas Pipeline Development

December 18, 2024 12:34 PM AEDT | By Team Kalkine Media

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Tamboran Resources, APA Group Partner on Gas Pipeline Development — Image source: shutterstock

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Highlights

Tamboran Resources (TBN) and Daly Waters Energy partner with APA Group (APA) to develop a critical gas pipeline

Sturt Plateau Pipeline to connect to the Amadeus Gas Pipeline for reliable energy delivery

Australian Energy Regulator rejects APA’s proposal to reclassify Basslink under new regulatory terms

Tamboran Resources (ASX:TBN) and Daly Waters Energy have formalized agreements with APA Group (ASX:APA), Australia’s largest gas pipeline operator, to develop the Sturt Plateau Pipeline. This project supports the natural gas Shenandoah South Pilot Project, where Tamboran and Daly Waters Energy are joint venture partners.

The proposed Sturt Plateau Pipeline spans approximately thirty-seven kilometers and will connect the Sturt Plateau Compression Facility to the Amadeus Gas Pipeline. This connection serves as a vital delivery point under an existing Gas Sales Agreement with the Northern Territory Government. Both Tamboran Resources (ASX:TBN) and Daly Waters Energy have secured foundation capacity contracts on the pipeline until at least 2041.

The pipeline is a significant step forward for natural gas infrastructure in the Northern Territory, where natural gas plays a leading role in electricity generation. APA Group (ASX:APA) will build, own, and operate the Sturt Plateau Pipeline. Construction is expected to commence in the second half of 2025, with operations projected to begin in the first half of 2026.

According to Tamboran leadership, natural gas remains essential for reliable energy supply across the Northern Territory, supporting household and industrial power demands.

APA Group’s Regulatory Setback on Basslink Proposal

In a separate announcement, APA Group (ASX:APA) addressed developments regarding its Basslink underwater interconnector. The high-voltage cable connects Tasmania’s electricity grid with Victoria and operates under a Market Network Service Provider (MNSP) framework.

Under this classification, APA submits bids to the Australian Energy Market Operator (AEMO) at set intervals, competing against other providers. Accepted bids determine spot market prices, rewarding the most cost-efficient supply options.

APA Group (ASX:APA) sought to reclassify Basslink under the Transmission Network Service Provider (TNSP) framework. Under this model, revenues are predetermined and regulated by the Australian Energy Regulator (AER), ensuring stable income regardless of market fluctuations.

However, the AER issued a draft decision rejecting the proposed reclassification. APA has stated that if this decision becomes final, it will maximize the value of Basslink by trading its capacity in the spot market, following the expiration of its current contract with Hydro Tasmania in June 2025. APA Group plans to utilize its existing market capabilities to align with current regulations.

Further consultations with stakeholders are expected before the AER announces its final decision.

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