The APA Group (ASX: APA) share price may be sliding on Monday, but hopes are likely lifting among ASX hydrogen fans.
The S&P/ASX 200 Index (ASX: XJO) energy infrastructure company has agreed to develop a major pipeline. And it's making sure the infrastructure can be used to blend hydrogen.
But news of the project — and the announcement of the sale of the company's Orbost Gas Processing Plant — hasn't been enough to bolster the company's stock today.
At the time of writing, the APA share price is $11.22, 0.36% lower than its previous close.
Let's take a closer look at the latest from the increasingly hydrogen-focused company.
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APA share price slumps despite $264m project
The APA share price is lower on Monday amid the company releasing significant news to the market.
APA announced an agreement with Snowy Hydro that will see it develop a 20-kilometre hydrogen-blend ready gas pipeline and 70 terajoule gas storage facility.
The pipeline – named Kurri Kurri Lateral – will run between the Sydney to Newcastle Pipeline and the Hunter Power Project. The gas storage facility will service the Hunter Power Project.
The project's construction cost is estimated to be around $264 million. It's expected to be finished by late 2023.
It's not the first time the company has looked towards blending and transporting hydrogen in its gas pipelines.
APA has previously found sections of existing gas pipelines in Western Australia can be used to transport hydrogen. It has also proposed to test if Victoria's high-pressure gas transmission system can be used to blend the low-emissions energy commodity.
The company also announced it's agreed to sell its Orbost Gas Processing Plant to Cooper Energy Ltd (ASX: COE) this afternoon.
The sale will bring in between $270 million and $330 million. The buyer will pay in four instalments within 36 months of completion – expected to be in late July.
According to APA, the book value of the plant is $236 million. The sale's proceeds will likely exceed both the book value and the plant's remaining forecast capital expenditure.
Proceeds will be put towards APA's organic growth pipeline and, potentially, towards repaying debt.
