APA Group on February 19, 2026, announced progression pertaining to Stage 3 of its East Coast Gas Grid – ECGG Expansion Plan, which is most likely to add almost 30% additional transport capacity and also address forecast southern market gas shortfalls from 2028.
When Stage 3 gets completed, APA will have added another 50% to the capacity of the East Coast Gas Grid through the last 5 years, having already raised the capacity by almost 25% through Stages 1 and 2.
The Stage 3 expansion goes on to include –
- Final investment decision – FID on Stage 3A – ECGG 3A having an investment of $260 million in order to increase north-to-south capacity, supplying the necessary Australian gas to the southern markets for winter 2028.
- $220 million investment when it comes to Stage 3B – ECGG 3B so as to enable continuous early works along with procurement of long lead items when it comes to Bulloo Interlink, which includes purchase of 342 km of line pipe and more pre-FID works in order to deliver additional capacity beyond the winter of 2028. FID is going to be subject to certain considerations, such as policy settings, progress along with the Gas Market Review, and final Board approval of the Federal Government.
It is well to be noted that the staged ECGG expansion plan is crafted so as to reduce the costs for customers by way of anticipation of demand with a fit-for-purpose as well as responsive solution. The fact is that the success of this approach gets evidenced by way of strong contracting for the past pipeline expansions, which have already been delivered.
Notably, modelling undertaken by APA offers confidence that the domestic gas delivered from northern supply markets can get delivered into southern markets at a cost, which is inclusive of transport, materially well below the cost of imported LNG.
Adam Watson, the APA CEO and Managing Director, said that “these capacity expansion investments by APA, along with future planned expansions, make it crystal clear that pipeline capacity will not be a constraint to solving projected east coast gas supply shortfalls. It’s now critical that the Federal Government implements a well-designed gas reservation policy that supports upstream investment and ensures adequate volumes are supplied into the east coast.
“There is no question that between Queensland and the Northern Territory there is enough gas in the ground to support both the domestic market and Asian LNG customers for decades to come.
“The notion that Australia, as one of the three largest LNG exporters in the world, would need to resort to importing LNG when lower cost, lower emissions domestic gas is readily available, simply doesn’t make sense and would represent a massive failure of government policy. The current Federal Government Gas Market Review provides the opportunity to avoid that failure for the long-term.
“Incremental investment in existing pipeline infrastructure is a logical, proven and timely solution to meet domestic gas needs. AEMO’s 2025 Gas Statement of Opportunities clearly states that expansion of existing pipelines, along with unlocking northern supply, would meet forecast gas needs well out into the 2030s without an LNG import terminal.
“When you look at the data, when compared to LNG imports, it’s clear APA’s expansion projects are the most reliable, cost-efficient and lower emissions solution to get Australian gas to where it’s needed.
“The gas demand and supply thematics playing out in the market give APA confidence to progress our East Coast Gas Grid expansion which, in turn, should give Australian consumers, business and industry the confidence that energy prices won’t be at the mercy of global energy markets.
“APA is addressing southern gas market transport bottlenecks and there’s plenty of domestic gas in the ground. The last piece is the introduction of the domestic gas reservation so Australia’s domestic gas market can get back to what it does best – powering Australian homes and driving Australian industry.”
In the gas market context
When it comes to the east coast of Australia, the supply available across the Surat and Bowen basins is indeed anticipated to offset the reducing southern supply, and, over the long term, new basins within the Beetaloo and Taroom Trough are also anticipated to further strengthen the supply and, at the same time, also lower prices when it comes to domestic consumers, while at the same time making sure that Australia can go on to capture the ongoing economic perks coming from LNG exports.
Robust ongoing demand when it comes to gas is anticipated to get underpinned due to industrial demand along with electrification, with gas-powered generation going ahead and supporting ongoing introduction pertaining to renewables into the energy system since coal is retired. One is also aware of the fact that there will be prominent additional gas demand coming from AI as well as data centres.
The ECGG Stage 3 investments of APA are most likely to deliver financial returns over and above the return hurdles by APA. The investments are going to get funded from the existing balance sheet capacity of APA and form part of its $3 billion organic growth pipeline.
- Stage 3A has already reached FIS, whereas Stage 3B is still subject to the final approval from the board.
- Argus Northeast Asian spot price as well as shipping cost as of July 31, 2025, and APA estimates when it comes to tolling charges and costs along with long-term firm transport.
- Stage 3A has gone on to reach FID, and Stage 3B remains subject to the approval from the board. AEMO’s 2025 Gas Statement of Opportunities, on page 87, goes on to include APA along with certain other pipeline expansions.
AEMO, Gas Statement of Opportunities – GSOO 2025. The step change scenario of AEMO is noted as its most likely scenario and therefore has been used within the APA analysis. There are more than 68,000 petajoules of 2P reserves as well as 2C resources located in Eastern Australia so as to serve an east coast market, which goes on to consume almost 500 petajoules of gas every year.
- AEMO’s 2025 Gas Statement of Opportunities, on page 87, goes on to include both APA as well as other pipeline expansions.
- Argus Northeast Asian spot price as well as shipping cost as of July 31, 2025, and APA estimates when it comes to tolling charges and costs along with long-term firm transport.
- Apparently, the project returns are developed based upon a number of factors, which include the relative risk profile pertaining to the project.
