In a statement on Friday, APA said the two companies had amended the terms for the existing 10-year agreement through to the end of 2016, as well as providing for additional firm and winter services til the end of 2008.

APA managing director Mick McCormack said the company believed its Moomba-to-Sydney Pipeline (MSP) had a “major role” in the development of the east coast gas market.

“In addition, gas as a fuel will play a significant part in the creation of the carbon emissions trading scheme and again APA Group is ideally placed to play a role in the development of that scheme,” he said.

“The successful conclusion of this negotiation will enable us to focus on pursuing growth opportunities for our business, including cementing the revenue outlook for the MSP.”