The Australian Energy Regulator today released a Final Determination on APA’s advance capital expenditure proposal to expand Victoria’s gas transmission pipeline capacity.
APA’s application aims to address risk of gas supply shortfalls forecast by the Australian Energy Market Operator for 2029.
The Final Determination sets out our decision to approve APA’s proposed capital expenditure for:
- APA’s proposed investment in two additional compressor stations for the South West Pipeline, to enable more gas supply from Western Victoria, including the Iona underground storage facility near Port Campbell.
- APA to undertake early works for further pipeline expansions in the future, in anticipation of further injection capacity from Iona and potential LNG import terminals that may be established near Geelong.
Together, these projects are intended to ensure pipeline capacity will meet Victoria’s gas supply needs into the 2030s.
Our Final Determination found a capital expenditure amount of $243.8 million ($212.7 million for compression and $31.1 million for early works) for these projects is prudent and efficient. This allows APA to add this amount to capital base for the Victorian Transmission System if incurred. If the incurred costs are higher, the AER will assess the overspend as part of the next access arrangement process.
Our Position Paper, released 15 May 2026, set out our in-principle support for APA’s proposals but noted we were still undertaking our detailed assessment of APA’s proposed costs. In making our assessment we requested further information from APA, undertook benchmarking, and engaged a consultant, EnergyQuest, to provide its view on the proposed efficiency of the costs. Our final determination completes our assessment of these costs.
On 1 December 2026 APA is scheduled to submit to us an access arrangement proposal for the Victorian Transmission System for the period 1 January 2028 to 31 December 2033.