APA Group is set to build a new gas transmission pipeline and a gas-fired power station to supply electricity to the Gruyere Gold Project in Western Australia for A$180m ($136.7m).

APA will design, build, own and operate the 198km Yamarna gas pipeline and 45MW gas-fired power station.

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A 15-year transportation agreement has been signed to support an electricity supply agreement for the same length of time with the Gruyere JV.

APA Group managing director and CEO Mick McCormack said: “I am very pleased to announce this organic growth project, it ticks all the APA boxes in terms of demonstrating our capability in energy solutions and construction; leveraging APA’s interconnected energy infrastructure; and long-term contracts with highly creditworthy counterparties.”

The Gruyere Project is a 50:50 joint venture between Gold Road Resources and Gold Fields Limited.

“Gold Road said that the minimum cost associated with the agreement is around A$215m.”

This project is located in the Yamarna greenstone belt of Western Australia, 200km north-east of Laverton, and north of APA’s Eastern Goldfields Pipeline.

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Gold Road said that the minimum cost associated with the agreement is around A$215m ($163.28m) and the estimated forecast expenditure over the contract period is around A$585m ($444.29).

The current project is the third customer leveraging the pipelines of APA Group, after the company commissioned the Eastern Goldfields pipeline 18 months ago.

Gas will be transported 1,500km to the Gruyere mine site using four APA interconnected gas pipelines, including Goldfields 1, Murrin Murrin Lateral, Eastern Goldfields, and Yamarna.

It is expected that commissioning of both the pipeline and power station will take place late next year.