ASX dividend share APA Group (ASX: APA) has announced a new project in Western Australia.
APA’s WA Project
APA is investing $460 million to construct a new 580km pipeline in Western Australia to connect emerging gas fields in the Perth Basin to the resource rich Goldfields region, forming an interconnected WA Gas Grid.
The Northern Goldfields Interconnect (NGI) is expected to be operational around the middle of the 2022 calendar year.
The NGI will be connected to APA’s Goldfields Gas Pipeline (GGP) which then connects to APA’s Eastern Goldfields network, which will create an interconnected APA gas pipeline system covering 2,690km from north to south and west to east.
APA CEO and Managing Director Rob Wheals said: “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.
“Our investment in the NGI will help stimulate significant economic development in Western Australia and has the potential to unlock hundreds of millions of dollars of investment in the Goldfields region, which is rich in gold, potash and battery minerals such as vanadium, nickel and rare earths.”
APA noted that each time it has extended its pipeline in this region, it has received more requests for connection from miners wanting a reliable and affordable energy sources, to add to variable renewable energy sources. The NGI doesn’t need state or federal government subsidies.
The NGI investment will double the additional capacity to the Goldfields region compared to spending the same amount to expand its existing GGP. The NGI can also be expanded capacity as required.
Summary thoughts
APA has done well to become such a large infrastructure business. It is a great ASX dividend share, having increased its distribution every year for over a decade.
New projects will unlock more cashflow for APA once completed, which will help support further distribution growth.
As an option for income, I think APA is a compelling idea. But there are other ASX dividend shares I would rather buy like Brickworks Limited (ASX: BKW).
