The Australian Energy Regulator has given private company Australian Gas Networks (AGN) approval to build a 40-kilometre natural gas pipeline that would run from Murray Bridge, through Monarto South and Kanmantoo to Mount Barker, southeast of Adelaide.

The company says the pipeline would be its biggest single investment in South Australia in decades and claims the project would produce $60 million in economic benefits.

Residents of the town who use natural gas currently purchase it in tanks.

AGN chief customer officer Andrew Staniford said the approval meant his company could get on with finalising “technical details” and consult with affected landholders along the proposed route before it makes its final decision on construction.

“This proposal would be our biggest single pipeline investment in South Australia in decades and will enable homes and businesses in the Mount Barker region to connect directly to the natural gas network,” he said.

“We will ensure that the pipeline is ‘future proof’ and can carry renewable hydrogen in the future to allow a journey to zero emissions gas.”

He added that the project would be timely for Mount Barker, which had a growing population.

“The Mount Barker region has been identified as a key part of Adelaide’s urban land supply, with population in the area predicted to grow from 33,000 to 55,000 people by the year 2036,” said Staniford.

“We will be delighted to be able to provide homes and businesses in one of South Australia’s fastest-growing areas with the choice of a more affordable and reliable energy source and to have the ability to connect customers as the region grows into the future.”

AGN owns a distribution network of over 8000 kilometres around the country and currently supplies natural gas to 450,000 customers in South Australia.