The APA Group (ASX: APA) share price has had a mixed day of trading today after the company announced a new project in Western Australia. Shares in the gas distributing giant are currently trading flat at $10.59, the same price as yesterday's close. However, the APA Group share price was as high as $10.78 in early morning trade.
What is the new project?
The APA Group announced an investment of up to $460 million to construct a 580km, 12" pipeline in Western Australia. The new pipeline will connect emerging gas fields in the Perth Basin to the resource rich Goldfields region, forming an interconnected WA gas grid.
The company said the new pipeline would be connected to its existing pipeline. In doing so, this would create a gas pipeline system in WA covering 2690km. Called the Northern Goldfields Interconnect (NGI) pipeline, the project is expected to be operational around mid 2022.
As part of the NGI commitment, APA Group advised it would divest 50% of its share in the Mid West Pipeline, to be advanced in the coming months. The transfer is not expected to have a material impact on APA's financial performance or operations.
What management said
APA Group CEO Rob Wheals said:
Having developed an interconnected gas grid on the East Coast that flexibly and seamlessly moves gas throughout eastern Australia, we are thrilled to now be creating one for Western Australia.
By connecting existing pipelines, our investment decision to build the NGI will not only add capacity to the system but will also increase gas supply options for customers. This will open up new regions for development supporting thousands of jobs both during and post-construction.
About the APA Group share price
Shares in the natural gas transmission company dropped as low as $8.06 in the March COVID-19 market crash. The APA Group share price has recovered somewhat, down 4.25% since January. In comparison, the All Ordinaries Index (ASX: XAO) is up 1.28%.
