THE SIGNIFICANCE OF COAL SEAM GAS IN EASTERN QUEENSLAND

Abstract

The commercial production of coal seam gas [CSG] in Australia is only a decade old. Over the last 10 years it has become a significant part of the Australian gas industry, particularly in Queensland where about 31 PJ or 30% of all natural gas used in the State was recovered from coal seams in eastern Queensland. In 2005 CSG was expected to have supplied 55 PJ or 44 % of the eastern Queensland gas demand. The mining, mineral processing and power generations in northwest Queensland, serviced by the Carpentaria Gas Pipeline, will continue to use gas from the Cooper-Eromanga Basin.

The CSG industry is reaching a stage of maturity following the commissioning of a number of fields while some significant new projects are either in the commissioning phase or under development. By the end of 2008 CSG production in Queensland is expected to reach 150 PJ per year, the quantity needed to meet Gas Supply Agreements for CSG that are presently in place.

Certified Proved and Probable (2P) gas reserves at 30 June 2005 in eastern Queensland were calculated to be 4,579 PJ, of which 4,283 PJ were CSG. Gas reserves (2P) for eastern Queensland a decade earlier were less than 100 PJ with those for CSG being less than 5 PJ.

The coal seam gas industry in both the Bowen and Surat basins—which includes major gas producers such as Origin Energy Limited and Santos Limited along with smaller producers such as Arrow Energy NL, CH4 Gas Limited, Molopo Australia Limited and Queensland Gas Company Limited—is now accepted by major gas users as being suppliers of another reliable source of natural gas.