Own APA shares? Here’s the latest on the company’s ‘ground breaking’ green hydrogen project

The company has taken another step towards transporting green hydrogen.

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Key points

  • APA has taken another step towards converting part of its 416-kilometre Parmeila Gas Pipeline in Western Australia into a green hydrogen transportation network
  • The ASX 200 giant has partnered with Wesfarmers to study using the pipeline to supply WesCEF's production facility with the zero-carbon energy commodity
  • Right now, the APA share price is outperforming the ASX 200 to trade at $11.12 

Owners of APA Group (ASX: APA) shares rejoice! The company’s plan to convert a gas pipeline into a green hydrogen transmission network has received a new breath of life.

APA has partnered with Wesfarmers Ltd (ASX: WES)’s Wesfarmers Chemicals, Energy, and Fertilisers (WesCEF). The pair are exploring the possibility of using APA’s Parmelia Gas Pipeline to supply renewable hydrogen to WesCEF’s production facilities.

At the time of writing, the APA share price is $11.12, 0.09% lower than its previous close. For context, the S&P/ASX 200 Index (ASX: XJO) has slipped 0.79%.

Let’s take a closer look at the latest green hydrogen news from the ASX 200 gas pipeline operator.

APA’s latest step towards green hydrogen

APA announced it had entered a memorandum of understanding with WesCEF last week. The pair will work together to conduct a pre-feasibility study into producing and transporting the zero-carbon energy source via a section of the Parmelia Gas Pipeline.

The ASX 200 giants will jointly fund the study. If it’s successful, green hydrogen could help produce green ammonia and other sustainable chemicals.

APA previously found a 43-kilometre section of the pipeline can house 100% hydrogen without reducing its operating pressure.

“We are pleased to be working with WesCEF in this ground breaking project,” APA CEO and managing director Rob Wheals said.

“This study could be a game-changer for the transportation of green hydrogen by supporting Australia’s first potential conversion of a natural gas transmission pipeline to 100% hydrogen-ready.”

Wheals continued:

Hydrogen won’t be delivered at scale through trucks and trains – we will need large scale interconnected networks which can bring the benefit of resources to our industry hubs, cities and homes …

Existing gas infrastructure is not just essential to powering the nation today, but it will also be essential to the delivery of clean molecules which are likely to be critical additions to our future energy mix.

APA will continue with its second phase of pressurised hydrogen testing over the coming year.

APA share price snapshot

This year so far has been a good one for the APA share price. It has gained 9% since the start of 2022. Meanwhile, the ASX 200 has slipped 7.6%.

The stock has also risen 15% over the past 12 months while the index has traded relatively flat.

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 has positions in and has recommended APA Group and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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