APA Goldfields Gas Pipeline - further capacity expansions supporting customer growth

APA Group (ASX:APA), Australia's largest natural gas infrastructure business, today announced a further expansion of the Goldfields Gas Pipeline in Western Australia's Pilbara mining region.

The new expansion is underpinned by a 15-year gas transportation agreement with the Mount Newman Joint Venture - in which BHP Billiton Minerals Pty Ltd holds an 85% stake - to supply new gas-fired power generation at Newman. The JV's Yarnima power station development will provide power for existing and expanded mining operations in the region.

It is the second expansion of the Goldfields Gas Pipeline announced by APA in a month, with the first, an expansion backed by a 20-year contract with Rio Tinto, having been announced on 22 December 2011.

APA Managing Director Mick McCormack said these two pipeline expansions will deliver 44 TJ/day of additional capacity on the Goldfields Gas Pipeline, an increase of 28% of its capacity, and provide APA with additional secure contracted revenue.

"They reflect the boom in mining activity along our pipeline, and demonstrate APA's continued ability and willingness to support our customers' growing demands for natural gas, with our dedicated internal management and operational capabilities, " he said.

The expansion work for the Mount Newman JV contract requires two new compressor stations, at Turee Creek and at the inlet to the Newman lateral, which will provide an additional 24 TJ/day on the mainline and the Newman lateral. The capital expenditure for this expansion and the work to cover the Rio Tinto contract totals approximately $150 million over the next two years.

These two expansions will be carried out concurrently with APA managing the construction project on behalf of the Goldfields Gas Transmission Joint Venture through which APA owns 88.2% of the Goldfields Gas Pipeline. The additional capacity for the Mount Newman JV will be available early in 2014.

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