APA Group (ASX:APA) announced it has reached a landmark agreement with Incitec Pivot (ASX:IPL). The contract, which will start on the commencement of commercial operations on the Northern gas pipeline, will deliver gas from the Mereenie field in southern Northern Territory, to IPL’s fertilizer plant at Gibson Island, Queensland, through some 3,300km of gas pipelines, the majority of which is APA’s East Coast grid.

APA Group is one of Australia’s largest energy companies owning a portfolio of assets estimated to be worth AU$20 billion.

As quoted from the press release:

The transportation agreement is for an initial term that concludes January 1, 2020, with an extension option. Gas will be received on APA’s Amadeus gas pipeline at Mereenie, then transported via the Northern gas pipeline, to enter APA’s East Coast Grid at Mount Isa. From there, it will travel via the Carpentaria gas pipeline, the South West Queensland pipeline and the Roma Brisbane pipeline to finally reach IPL’s plant near Brisbane, Queensland.

“IPL is a foundation customer of APA and it is very pleasing to help an industrial customer, particularly one with an almost 100 year history of manufacturing in Australia,” said managing director Mick McCormack.

“This unique and innovative solution for IPL will help see the Gibson Island plant continue to operate and contribute to the Australian economy, importantly maintaining jobs for Australians. I am extremely pleased to say that APA has yet again been able to provide a cost effective and flexible service to one of its key customers. We are always looking to add value for our customers to assist them in optimizing their energy requirements,” said Mr McCormack.

Click here to read the full press release