Australia’s largest natural gas infrastructure business APA Group has extended its transmission footprint into the Surat Basin’s coal-seam gas reserves with the $82.6 million acquisition of the Berwyndale-to-Wallumbilla Pipeline in Queensland from AGL Energy.

Newly commissioned in 2009 ,the Berwyndale-to-Wallumbilla Pipeline is a 112 km, 16-inch pipeline extending from the Berwyndale coal-seam gas fields in the Surat Basin to the Wallumbilla hub in Central Queensland, which connects three major pipelines, including APA’s Roma to Brisbane Pipeline.

The acquisition price of $82.6 million is underpinned by a long-term gas transportation agreement (GTA) with AGL Energy, which retains an option for increased capacity, which if triggered would see an additional payment made to AGL Energy of up to $21 million (depending on the size and timing of the additional capacity). In addition, there are options to extend the term from 17 years to 27 years.

APA Managing Director Mick McCormack said: "The Berwyndale-to-Wallumbilla Pipeline extends APA’s core gas-transmission business footprint in the booming Surat Basin coal seam gas region.

"Together with the Roma-to-Brisbane Pipeline, these assets are linked to the Wallumbilla hub, the central point for moving coal seam gas into domestic markets in Queensland and the southern states.

"This acquisition allows us to join our existing assets to one of the most promising coal-seam gas regions in the country.

"We expect a growth in demand for gas transmission services to move this gas into east coast markets and APA’s assets will continue to play a key role in providing this service. The Berwyndale-to-Wallumbilla Pipeline will prove a useful addition to APA’s gas transmission footprint."

Mr McCormack said that "like any new pipeline in start up phase, the asset would be slightly operating cash flow per security decretive in the first three years due to the ramp-up in the long-term GTA with AGL Energy, but accretive by 2014".

Financial close is being targeted for April 2010.