Coal seam gas decision a turning point for industry

The Federal Government’s approval of two liquefied natural gas plants in Gladstone represents a turning point for the Queensland gas industry.

Federal Minister for Sustainability, Environment, Water, Population and Communities, the Hon. Tony Bourke MP announced the approval for the first multi-billion dollar plants in Australia to process coal seam gas (CSG) for export in October.

The Australian Petroleum Production & Exploration Association (APPEA) chief executive, Belinda Robinson said the announcement established Queensland, through its natural gas resources, at the forefront of efforts to transition the economies of Asia to a less carbon-intensive future.

According to Ms Robinson, the establishment of an export gas industry in Gladstone will generate 18,000 jobs, many billions of dollars in export revenues, will increase Queensland’s Gross State Product by 1 percent and generate around $1 billion in annual state taxes.

The CSIRO estimates the CSG fields of Queensland and New South Wales contain enough gas to power a city of one million people for 5000 years.

According to the ABC, Queensland Premier Anna Bligh said the gas approval marks a turning point for the Queensland economy.

“The significance of this is a whole new industry,” Premier Bligh said in October.

“It is as big and important for Queensland as the opening up of the Bowen Basin was decades ago.”

Minister Bourke’s announcement included hundreds of strict environmental conditions.

“We must protect the Great Artesian Basin, our threatened species, our waterways and the Great Barrier Reef. Today’s announcement involves more than 300 conditions which provide these environmental protections and allow the jobs and investment in Queensland to go ahead,” Mr Bourke said.

The latest edition of the International Energy Agency’s annual World Energy Outlook – released in London in November – included an encouraging picture for Australia and its future natural gas production. The new report forecasts Australian gas production overtaking Norway towards the end of the projection period (2035) to become the third-biggest OECD gas producer, behind the United States and Canada.

CSG explorer, Comet Ridge announced its first significant contingent resource (83 PJ) certification for its Bowen Basin joint venture in October.

Comet Ridge managing director, Tor McCaul said the certification was a significant milestone for the company. Mr McCaul said the certification had been achieved at what was a promising time for the Queensland CSG sector.

“We are very optimistic about the outlook for (CSG) in Queensland. While there has been some uncertainty in the past, the sector is now entering a new phase and we believe we are well positioned to take advantage of the emerging opportunities,” Mr McCaul said.

Comet Ridge also increased its stake in a key NSW CSG basin with the agreement to acquire Greenpower Energy Limited’s 20 per cent interest in the prospective Gunnedah Basin permit PEL 428.

The transaction lifts to 40 per cent Comet Ridge’s stake in the joint venture which is exploring for both coal seam and conventional gas in the northern NSW basin. The CSG exploration is operated by Eastern Star Gas.



Due care needed for UCG compliance

The Australian Syngas Association (ASA) said it fully supports the Queensland Government’s appointment of an independent body to investigate traces of hydrocarbon chemicals reportedly found in coal seam gas wells in the Surat Basin, southern Queensland.

The national representative body for Australian underground coal gasification (UCG), gas to liquids (GTL) and coal to liquids (CTL) industries was formed in October.

The ASA is in the process of informing state premiers, Federal Government and shadow ministers, local government bodies, industry associations and peak bodies of its role.

Former Queensland government attorney general and new ASA executive director, Paul Clauson said he commended Minister for Climate Change and Sustainability, Kate Jones’ appointment of an independent service provider to assess and investigate the reported detection of chemicals known as BTEX at eight exploration wells being developed by Australia Pacific LNG around Miles on the Western Downs of Queensland.

“It is reassuring to see that the Queensland Government has now adopted an attitude of due care and attention to these issues on the back of the confrontational approach taken by the Department of Environment and Resource Management (DERM) towards Cougar Energy at its Kingaroy site some months ago,” Mr Clauson said.

Cougar Energy’s Kingaroy underground coal gasification (UCG) plant was shut down in July 2010 amid similar reported contamination concerns.

Linc Energy managing director and ASA president, Peter Bond told AAP it was wrong for the state government to continue to hold up Cougar’s operations despite test results clearing them of contaminating ground water.

Mr Bond said he also believed the government did not properly consult Cougar before going public with the contamination scare.

Responding to a Kingaroy Concerned Citizens Group letter to the government opposing UCG, Cougar Energy’s managing director, Len Walker said the Kingaroy project presented no danger to human health, drinking water, livestock and other farming activities.

“Our project has not contaminated the community ground water supplies at Kingaroy,” Mr Walker stated.

“UCG is a viable alternative energy source to produce cost-competitive electricity for an energy-hungry Australia,” he said.

Mr Clauson said he wanted reassurance from the state government that companies across all gas industries were being treated in a similar and consistent manner as they moved forward to commerciality.

“These industries are a significant employer of local skilled and unskilled workers and form an important role in supporting and developing a safer energy outcome for this nation,” Mr Clauson said.


Korea Gas Corporation signs gas research agreement with university

The University of Queensland’s (UQ) technical expertise and research in unconventional gas resources such as coal seam gas, has attracted the attention of the single largest importer of liquefied natural gas in the world.

The Korea Gas Corporation (KOGAS) signed a five-year agreement with UQ in October to foster research collaboration and for UQ to provide employee training and consultancy services in advanced coal seam gas technology.

UQ deputy vice chancellor, research, Professor Max Lu said the memorandum of understanding would further enhance the university’s extensive research activities in coal seam gas extraction, conducted by UQ’s Schools of Chemical Engineering and Earth Sciences.

“This agreement with KOGAS recognises that UQ has international expertise in unconventional gas, both upstream resource exploitation and in downstream liquefied natural gas processing,” Professor Lu said.

“UQ is in a strong position to provide industry with new insights and ideas for better utilising gas reserves and developing new technologies and this agreement will pave the way for further research and development in coal seam and shale gas,” he said.

KOGAS research and development division director and vice-president, Dr Kim Young-Doo, said the corporation believed the agreement would enhance the corporation’s current research and development program in sustainable energy systems.

“We are confident that the collaboration between KOGAS and UQ will provide fruitful outcomes for many years,” Dr Young-Doo said.

“The agreement will provide co-operative research opportunities in developing clean energy and will give KOGAS staff access to world’s best practice training in advanced coal seam gas technology.”

Head of the UQ School of Chemical Engineering, Professor Paul Lant said the agreement would make Queensland an international hub for research and development of new technologies.

“We have conducted some of the world’s most extensive research into understanding the way fluids flow through coal seams and their dynamic influence on coal reservoir properties,” Professor Lant said.

UQ is currently heading up a number of projects to better understand the dynamics of coal seam gas reserves and increase the efficiency of methane extraction from coal. These include using carbon dioxide or flue gas to drive out more methane from the coal seam or using microbes to manufacture more methane from the coal itself.



Consultation process on gas access arrangements 

The Australian Energy Regulator (AER) publicly released the access arrangement proposal submitted for the Envestra gas network for the period 1 July, 2011, to 30 June, 2016, for consideration and comment by interested parties. It also released the the access arrangement proposal submitted for the APT Allgas Qld gas network.

The access arrangement proposal establishes the basis for the terms and conditions of access for users and prospective users for the pipeline.

Under the AER’s Regulatory Information Notice requirement 2.2.3, Envestra is required to provide in its access arrangement proposal submission, to the extent that it is practicable, a forecast of pipeline capacity and utilisation of pipeline capacity over the access arrangement period.

Envestra is the largest gas distribution company in Australia, serving more than one million households and industrial/commercial enterprises.

In preparing for this access arrangement review, Envestra has reconsidered its market position and vision for the gas networks over the next 10 years in order to define its next stage of development.

The main centres served by the network are Adelaide, Mt Gambier, Whyalla, Pt Pirie, Barossa Valley, Murray Bridge and Berri.

The APT Allgas network supplies natural gas to end users in Brisbane (south of the river), South Coast (extending into northern New South Wales), Toowoomba and Oakey through over 2900 km of distribution mains. During FY10 a total of 10.5PJ was delivered to 81,823 end users.

The AER is seeking submissions on the access arrangement proposal for the APT Allgas network for consideration in making its draft decision on the proposal.


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