Tamboran Resources (ASX:TBN) and Dairy Waters Energy have entered into a binding agreement with APA Group. (ASX:APA)Australia’s largest gas pipeline operator, develops the Sturt Plateau Pipeline (SPP). The pipeline will support the proposed natural gas Shenandoah South Pilot Project, in which Tamboran and Dairy Waters Energy are joint venture partners.

The 37km pipeline will connect the proposed Sturt Plateau compression facility to the APA-owned Amadeus Gas Pipeline, which is the primary delivery point for gas volumes under a gas sales agreement with the Northern Territory Government.

Tamboran and Dairy Waters have committed to contract all of SPP’s base capacity from commissioning until at least 2041.

APA will build, own and operate the pipeline, with construction expected to begin in the second half of 2025 and operations in the first half of 2026.

Joel Riddle, Managing Director and CEO of Tamboran, said: “Natural gas is the Northern Territory’s largest source of electricity generation, so Tamboran is a reliable source of energy for the people of the Territory. We are proud to play a key leadership role in securing energy supplies and maintaining lighting and air conditioning.” Conditioner is working. ”

Energy regulator rejects proposal

In a separate announcement, APA reported on the high-voltage Buslink submarine cable that will connect Tasmania’s electricity grid to Victoria.

Currently, this cable is classified under the Market Network Service Provider (MNSP) framework. This means that APA submits bids for transmission capacity to the Australian Energy Market Operator (AEMO) at various intervals. AEMO collects bids from all providers and stacks them from lowest to highest, prioritizing cheaper supply to meet demand. The highest bid determines the spot market price for a given period of time, which is paid to all winning bidders.

APA wanted to change this classification and instead operate buslink interconnectors under the Transmission Network Service Provider (TNSP) framework. TNSP is essentially a monopoly under the supervision of the Australian Energy Regulator (AER). AER predetermines revenue based on construction, maintenance, and operating costs plus a reasonable return on investment, which is paid regardless of day-to-day fluctuations in demand. In effect, TNSP is guaranteed a stable and predictable source of income.

However, the AER issued a draft decision leaving Basslink’s regulatory classification unchanged.

APA CEO Adam Watson said: “If today’s draft decision…is confirmed as final, APA will continue to advance its plans to trade Basslink capacity on the spot market to the benefit of APA investors. Our top priority will be to maximize asset value.” In line with market rules, when the Hydro Tasmania contract expires on 30 June 2025, it will be able to leverage existing systems and capabilities in place across APA. ”

Further consultation with stakeholders, including APA, is expected before the AER makes a final decision.

Apa Group stock closed 1.51% lower at $7.18 yesterday.

Tamboran Resources stock price rose 3.85% to close at $0.14.