What does the future hold for the Moomba Sydney ethane pipeline?

Santos' Barossa pipeline is on the verge of completion. Image: Dusan Kostic/stock.adobe.com, ethane, gas, pipeline, pipe, moomba

APA Group is assessing a range of potential future uses for the Moomba Sydney ethane pipeline after its principal user entered into voluntary administration.

The Moomba Sydney ethane pipeline (MSEP) is a 1300km ethane pipeline connecting Moomba, South Australia to Qenos’ petrochemical facility in Port Botany, NSW.

Plastics manufacturer Qenos has until now been the sole user of the MSEP. However, the company recently entered into voluntary administration, with no expectations of restarting its manufacturing facility.

According to APA, Qenos is the only likely customer with demand for ethane to be transported via the MSEP. Similarly, the MSEP is APA’s only asset that transports ethane as well as its only long-distance single user pipeline.

It fewer words, MSEP is a niche asset, and APA must now decide what to do with it.

“There are a range of potential alternative uses for the MSEP being assessed, including the possible conversion of the asset to transport and store natural gas, to service the growing demand for capacity on APA’s east coast gas grid,” APA told the market.

But the company also indicated that it will take some time to fully assess MSEP’s potential alternative uses.

“The accounting standards require an assessment of the carrying value of the asset to be finalised prior to completion of the 2023–24 financial statements and, as such, APA has taken a conservative approach to assume the asset will not be utilised for the foreseeable future and therefore expects to impair the asset in full.”

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