The NSW government has approved a new pipeline connecting the existing gas network to the 660-megawatt power station under construction at Kurri Kurri.
The Kurri Kurri "lateral pipeline project" includes a 21-kilometre underground pipeline from Kurri Kurri to the existing Sydney to Newcastle service, a compressor station and a 24km underground storage pipe.
The power plant is due to open at the end of next year and will run on diesel until the pipeline is built.
The new pipeline, to be built by gas infrastructure company APA, will connect to the existing pipe at Lenaghan, north-west of Fletcher on Newcastle's urban fringe.
A compressor station and storage pipeline are required because the Sydney to Newcastle pipeline does not have enough volume or pressure to meet the power plant's supply requirements.
The storage pipeline will not be capable of holding hydrogen, another possible fuel source for the power station.
The transmission pipeline will be built in accordance with a design code for potential use of up to 10 per cent hydrogen in the east coast gas network.
The NSW Department of Planning and Environment noted in its assessment report on the pipeline that "constraints in the transmission and storage network would not preclude the future use of hydrogen at the Hunter Power Project and that Snowy Hydro is required under its infrastructure approval to investigate the latest technology for displacing natural gas or diesel as the fuel supply".
The government will submit the project to the federal government for final approval, which, if granted, is expected to allow construction to begin in the following months.
Planning Minister Anthony Roberts said the pipeline would inject about $260 million into the economy and employ almost 400 workers at the peak of construction.
The approval comes two weeks after the government declared Santos' planned 50km pipeline connecting its proposed Narrabri coal-seam gas fields to the approved Hunter Gas Pipeline from Queensland to Newcastle as critical state infrastructure, giving it high-priority assessment status.
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