Origin Energy, listed on the ASX in February 2000, is one of Australia’s domestic energy providers, providing gas and electricity to over two million Australian homes and businesses. The company is a participant in most segments of the energy supply chain including natural gas and oil exploration and production; power generation; energy retailing; and network management services.

Origin and Coal Seam Gas

Coal seam gas (CSG) is an energy source that will provide significant economic benefits to Australia, and to Queensland where world class resources are located. Queensland is extremely fortunate to have extensive CSG resources with proved plus probable reserves in excess of 2,500 PJ, which represents the equivalent of 13 years coverage of the Queensland market. There is potentially more than 25,000 PJ of recoverable CSG in Queensland. Importantly, this gas is located close to the major growth corridors along the east coat from Brisbane to Gladstone.

As an end-use product, CSG is the same as natural gas, and can be utilised in all natural gas appliances and commercial applications. The difference between CSG and other natural gas is mostly how it occurs in nature. CSG collects in the coal seam by bonding to the surface of coal particles, whereas other natural gas is stored in the pore spaces between grains of sandstone or similar rock.

Origin’s interest in exploring for natural gas in and around the coal fields of the Surat and Bowen basins started in the mid-1990s as part of the company’s onshore exploration activities, and culminated in acquiring an interest in the Spring Gully and Fairview developments in 2002.

Spring Gully, 80 km north of Roma, is a large CSG accumulation and, in conjunction with the nearby Fairview field, Origin has booked Proved and Probable (2P) reserves of over 1,000 petajoules (PJ), and estimates that its share of the resource ultimately recoverable from the two fields could exceed 2,000 PJ. Each year over 100 PJ of gas are consumed in Queensland and this market is growing steadily. Spring Gully, located within the arc of gas pipelines connecting Gladstone, Roma and Brisbane, is ideally placed to address this rising demand. Origin is therefore planning a significant development program over the next few years to bring this resource to the Queensland market. Stage 1 of the Spring Gully CSG development project is now complete and includes the drilling and completion of 50 coal seam gas wells as well as the installation of associated surface infrastructure including 150 km of water and gas gathering lines, the construction of a 36 TJ/day gas processing plant and the supply of water storage facilities. Up to 400 CSG wells are expected to be drilled in the area over the next 20 years.An 87 km steel pipeline has been constructed to ship gas from the Spring Gully CSG project to the gas distribution hub at Wallumbilla. The pipeline and the Spring Gully CSG Project are subject to an approved Environmental Management Plan, Cultural Heritage Management Plan and Services Agreements with the Mandandanji People. An Indigenous Land Use Agreement has also been negotiated with the Iman #2 native title claimants whose claim covers a large proportion of the new Spring Gully coal seam gas development.The total field operation employs around 20 people and will supply gas contracts signed with AGL and other south east Queensland gas users.

Origin’s Future Plans

At Spring Gully, Origin is proposing the development of a nominal 1000 MW gas-fired power station. The first 500 MW stage will allow Origin to meet the current forecast demand for electricity generation capacity expected in 2008 and beyond.The power station will be configured as a high efficiency combined cycle plant utilising a combination of gas turbine and steam turbine power generation technologies. The new power station will emit half the greenhouse gases of a black coal fired station of comparable size.Fuel for the power station will be provided from the adjacent Spring Gully CSG gas plant. Cooling water will be sourced from the saline water produced by the CSG process. The co-location of the power station with the CSG development provides synergies that enhance the economic and environmental performance of the whole Spring Gully project. The opportunity to develop a low cost natural gas-fired power station also enhances system reliability and security, and diversifies the generation fuel mix in Queensland. The Spring Gully Power Station project was declared a “Significant Project” by the Queensland Coordinator General under Section 26 of the State Development and Public Works Organisation Act 1971 on December 23rd 2004, following submission by Origin of the Initial Advice Statement. This represents the first milestone in the environmental and planning approval process for the project.

The next steps in gaining development approval for the power station include the preparation of an Environmental Impact Statement (EIS) and ongoing community consultation – a process which is expected to take up to 12 months. If development approval is obtained and Origin decides to proceed at that time, construction would take a further two years approximately – in time to meet the currently forecast demand for extra electricity generation capacity.

To support the development of the power station and to provide for Queensland’s ongoing demand for natural gas, Origin will continue to develop both the Spring Gully coal seam gas resource and other reserves throughout Queensland
For more information, please contact:

Alison John
Community Liaison Officer
Origin Energy (Coal Seam Gas)
Ph (07) 4622 2244

Wayne Gregory
National Manager Public Affairs
Origin Energy
Ph (03) 9652 5886

Visit Origin Energy’s website www.originenergy.com.au for more information.