APA Group Seeks Partner for Pipeline Purchase in Curtis Island Project

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Researched by Industrial Info Resources Australia (Perth, Australia)--APA Group Limited (ASX:APA) (Sydney, New South Wales), Australia's largest gas transmission pipeline company, is believed to be looking for a partner to help purchase the supply pipelines to liquefied natural gas (LNG) plants that are under construction on Curtis Island.

Curtis Island sits just off the mainland in Gladstone Harbour, Queensland, and is home to three of Australia's largest resource projects: the Australia Pacific LNG project (APLNG), led by Origin Energy Limited (ASX:ORG) (Sydney) and ConocoPhillips (NYSE:COP) (Houston, Texas); the Queensland Curtis LNG project (QCLNG), led by BG Group (LSE:BG) (Reading, England); and the Gladstone LNG project (GLNG), led by gas company Santos Limited (ASX:STO) (Adelaide, Australia).

All three projects will source coal seam gas from the Bowen and Surat basins in central Queensland, before converting the gas to LNG for export to Asia. A distance of about 280 miles (450 kilometres) separates the gas fields from Curtis Island, and all three projects are constructing their own long-distance, high-pressure gas pipelines.

No official announcement has been made by any senior executives of the LNG projects. But they have suggested that once the pipelines are complete, they will look to offload them to another party and re-coup some of the capital required to construct the projects.

APA Group CEO Nick McCormack has said that his company is interested in buying the pipelines if they become available. "Absolutely, we're interested," he said at a conference earlier this year. "They've got my phone number."

Although APA is one of Australia's largest companies, with the total investment required for purchasing all three pipelines topping multiple billions of dollars, APA could not mange the purchase on its own and will seek a partner for the bid. "I don't know how big it is--I've heard two, three or four billion dollars," APA Group chairman Len Bleasel said. "That's a bit much for us, so you do it maybe in joint venture."

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