The Project

Overview

The Gloucester Gas Project (the Project) is a coal seam gas (CSG) project located in Petroleum Exploration Licence (PEL) 285, which fully encompasses the Gloucester Geological Basin in New South Wales. The project is wholly owned and operated by AGL.

In February 2011, the independent NSW Planning Assessment Commission (PAC) approved the Gloucester Gas Project. 

The Gloucester Gas Project includes:

• The Stage 1 Gas Field Development Area - including up to 110 gas wells and associated infrastructure including gas and water gathering lines;
• A Central   Processing Facility – for compression and processing of the extracted gas, and a water treatment plant;
• An up to 15MW gas fired electricity generating facility;
• A gas transmission pipeline between the central processing facility and the existing gas supply network at Hexham; and
• A delivery station at Hexham to connect the transported gas to the existing Sydney-Newcastle trunk pipeline.

The Gloucester Gas Project is presently awaiting a determination of its application for approval under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) from the Commonwealth Minister for Sustainability, Environment, Water, Population and Communities.

The proposed Project provides a means of commercially developing the Gas resources of the Gloucester Basin. The project includes:

• Drilling production wells in the development area;
• Building infrastructure such as roads and gas and water gathering lines;
• A central gas processing facility to treat the gas and water;
• A high pressure gas transmission pipeline to deliver the gas to the existing network at Hexham; and
• A Delivery Station at Hexham to transfer the gas from the pipeline to the Sydney Newcastle trunk pipeline.

The Project will benefit the community, the Hunter region and the State. Specifically, the Project represents an important development of New South Wales resources because it will:

• Supply energy to the Sydney and Hunter regions and NSW as a whole;
• Create employment opportunities, during construction and operation;
• Improve service;
• Develop NSW's natural resources in an environmentally sustainable manner;
• Reduce greenhouse gas emissions in the region; and
• Decrease reliance on power supplies outside of NSW.

The Project has been declared by the Minister for Planning as a Major Project under the Environmental Planning and Assessment Act 1979 (EP&A Act) which requires an Environmental Assessment (EA) under Part 3A of the EP&A Act.

• The Gloucester Gas Project's EA can be viewed here.
• More about Coal Seam Gas can be found here.

History

In late 2008, AGL purchased PEL 285 from Lucas Energy Pty Limited and Molopo Australia Limited. In 1992, the Licence had been granted to Pacific Power under the Petroleum (Onshore) Act, 1991. Pacific Power operated the permit until Lucas (as operator) and Molopo purchased the licence in 2002.

The region has a rich exploration history, with active searching for coal deposits occurring since the 1970s. Gloucester Coal Limited's activity is a neighbour to AGL's low impact natural gas exploration activities.

Drilling and Exploration

Key gas targets in the Gloucester Basin are the coals from the Upper Permian Gloucester Coal Measures. In 2009, AGL conducted a core hole drilling program. High gas contents have been confirmed in all 18 core holes that have been drilled.

In the region's wells, AGL has found hydraulic fracturing to be a valuable method for increasing gas flow.

More can be learned about AGL's Gloucester hydraulic fracturing here.

In 2009 and 2010, AGL conducted seismic exploration. Seismic is an exploration method used to create a map of the structures beneath the Earth's surface. The method sends seismic waves, similar to very low frequency sound waves into the Earth, where the different rock formations then reflect the waves back to the surface, and they are recorded over a period of seconds.

What's next?

Geologists are currently interpreting the data collected from 3D Seismic performed in 2010. Based on the conclusions from the interpretation, additional exploration holes will be drilled, perhaps as early as April 2011.