APA (ASX:APA) share price leaps 5% amid hydrogen disruption plans

APA’s made a move towards supplying Victoria with hydrogen energy.

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The APA Group (ASX: APA) share price had a brilliant day on Monday despite no price sensitive news released by the company.

However, it did announce its plan to test if Victoria’s high-pressure gas transmission system can be safely used to blend hydrogen.

As of Monday’s close, the APA share price is $9.85. That’s 4.45% higher than it was at the end of Friday’s session.

For context, the S&P/ASX 200 Index (ASX: XJO) closed 0.05% higher today.

Let’s take a closer look at today’s news from the energy infrastructure company.

APA share price gains amid hydrogen proposal

Australia’s latest hydrogen project has been put forward, with APA planning to test if Victoria’s existing infrastructure can accommodate part of the transition to low-carbon energy.

APA CEO and managing director Rob Wheals said:

This landmark hydrogen study… could put Victoria in the box seat to achieve the least cost, fastest, and most efficient transition to a low-carbon future…

Victoria’s gas infrastructure will be vital to connecting Victorians to the energy solutions of tomorrow… and APA’s pipelines are adjacent to some of the best geographical areas for hydrogen production in Australia.

The company’s proposition is part of its Victorian Transmission System access arrangement submission to the Australian Energy Regulator.

The Victorian Transmission System transports nearly all the natural gas used in Victoria through its network of pipelines.

APA’s submission still needs the approval of the regulator.

Other benefits?

Wheals also noted, if approved, the project would benefit from APA’s pilot project in Western Australia. The project is investigating converting a section of gas pipe to carry hydrogen:

Our work in Western Australia will significantly reduce the costs of the proposed Victorian study as a result of the advancements we have already made in partnership with Future Fuels CRC and the University of Wollongong.

The proposition follows the Australian Energy Ministers’ recent decision to speed up the process of amending the National Gas Law.

Doing so could help include hydrogen blends, biomethane, and other renewable methane gas blends in the national energy regulatory framework.

The proposal will test 9 sections of the Victorian network under pressurised hydrogen conditions.

Right now, the APA share price is 0.7% higher than it was at the start of 2021. It has also gained 13.2% since this time last month.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended APA Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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