APA commits $700 million to Bulloo Interlink Pipeline after Origin Energy agreement
APA Group (ASX: APA) has reached a final investment decision (FID) on the Bulloo Interlink Pipeline (BIL) and entered into a five-year east coast gas transport and storage agreement with Origin Energy. The FID commits $700 million for the construction and commissioning of the BIL.
The BIL represents Stage 3B of APA’s East Coast Gas Grid (ECGG) Expansion Plan and is designed to address projected north-to-south gas transport constraints for Australia’s east coast gas market. The $700 million commitment is in addition to APA’s February 2026 decision to invest $220 million to progress early works.
For investors, the capital is being committed alongside an executed contract with a firm revenue commitment, which anchors the project’s demand case.
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Origin Energy agreement underpins firm revenue
Key terms of the five-year agreement
The agreement covers gas transportation and storage services on APA’s ECGG. Its key terms include:
- Duration: five years
- Structure: take-or-pay and inflation-linked
- Services: gas transportation and storage
- Start date: services commence on 1 January 2028, at the conclusion of Origin’s existing arrangements
The agreement includes contracted summer and winter capacity on APA’s key east coast assets: the South West Queensland Pipeline, Moomba to Sydney Pipeline, Roma to Brisbane Pipeline and, when commissioned, the BIL.
Under a take-or-pay structure, the customer commits to pay for contracted capacity whether or not it uses the full volume. APA describes the agreement as delivering a firm revenue commitment, although the announcement does not disclose its dollar value.
Customer demand signals
APA stated that the Origin agreement, together with strong engagement with other customers, gives it confidence that demand for the BIL is strong.
Adam Watson, Chief Executive Officer and Managing Director
“We are also proud to continue our longstanding partnership with Origin Energy. The five-year agreement announced today demonstrates the strong ongoing relationship with Origin and demand for contracted capacity across our east coast assets more broadly.”
What is a gas pipeline expansion and why does it matter?
A gas pipeline expansion adds transport capacity so more gas can move from where it is produced to where it is used. The announcement points to gas available in Queensland and the Northern Territory, while projected shortfalls relate to Australia’s southern states, so pipeline capacity can become a constraint on supply.
Two contract terms are central to the Origin agreement. A take-or-pay contract requires the customer to pay for reserved capacity regardless of use, while an inflation-linked arrangement adjusts the price over time in line with inflation.
According to the Australian Energy Market Operator’s (AEMO) 2026 Gas Statement of Opportunities, unlocking northern gas supply and expanding existing pipelines will push out projected shortfalls in southern markets into the 2030s. AEMO also indicates there are over 63,000 petajoules of 2P reserves and 2C resources in northern Australia (page 48).
Adam Watson said the BIL is designed to ensure pipeline capacity is not a constraint to meet projected gas demand for the southern states “later this decade and into the early 2030s.”
BIL project specifications and Stage 3 delivery timeline
The table below summarises the milestones disclosed in the announcement.
| Milestone | Timing | Detail |
|---|---|---|
| Construction start | Early 2027 | Subject to relevant approvals |
| Stage 3A (ECGG expansion) | Winter 2028 | Remains on track for delivery |
| Origin services commence | 1 January 2028 | At conclusion of Origin’s existing arrangements |
| BIL commercial operation | Winter 2029 | Targeted |
| Revenue ramp-up | ~5 years post commissioning | Revenues expected to ramp up over this period |
The BIL’s specifications are:
- An underground, high-pressure natural gas transmission pipeline
- Maximum capacity of 800 TJ/day
- A link between the South West Queensland Pipeline in Queensland and the Moomba to Sydney Pipeline in New South Wales
APA will continue to advance environmental approvals, detailed design, corridor assessment, procurement and stakeholder engagement. For Stage 3A, procurement of key items and contractor agreements are well progressed and site works are underway.
The BIL forms part of the broader Stage 3 expansion works announced in February 2026, which will deliver ~30% more north-to-south gas transport capacity when completed. Once Stage 3 is delivered, APA will have increased north-to-south capacity in its ECGG by more than 50% since 2023.
The Stage 3 expansion works were first backed in February 2026 with a funding commitment that targets 30% more north-to-south capacity by winter 2028, and the BIL now extends that program with its own dedicated investment decision.
Investment case: funding, returns and growth pipeline
The announcement outlines the following points on the investment:
- It will be funded from existing balance sheet capacity.
- It is expected to deliver returns above APA’s hurdle rates, though no specific figure is disclosed.
- It forms part of APA’s ~$3.5 billion organic growth pipeline.
- The expansion is not expected to change APA’s standing inflation-linked tariffs for key pipeline transport routes.
- The BIL is expected to reduce long-term stay in business capital expenditure required on the Moomba to Sydney Pipeline.
The BIL sits within a growth pipeline that also includes the Brigalow peaking plant, a 400MW gas-fired project with CS Energy backed by a 25-year inflation-linked offtake agreement and funded from balance sheet capacity.
Watson also indicated that, beyond the BIL, APA can deliver further capacity increases, incrementally, to ensure east coast gas demand continues to be met by APA’s pipeline and storage infrastructure.
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