The Darling Downs Power Station will be the biggest combined cycle power station in Australia, producing enough power to supply the equivalent of 400,000 Queensland homes, Origin said yesterday in a statement.
Last week the Age newspaper reported that the Queensland Government's increased gas-fired energy target had prompted the company to prioritise this project at its Spring Gully site over the proposed Mortlake project in western Victoria.
Queensland gas supply and power demand is central to Origin's growth plans.
Last November, Origin agreed to pay $1.2 billion for an electricity retailer previously owned by the Queensland Government, in preparation for the start of full competition in energy supply on July 1.
Queensland energy demand is growing at 3.5% a year and the state currently requires electricity retailers to source 13% of their power from gas-fired plants.
By 2020, the percentage will rise to 18%, with 10% of power to come from renewable sources.
In contrast, Victoria has a renewable energy target but no gas target.
Yesterday, Origin said it had completed $780 million worth of contract documents with contractors, including GE and CH2M Hill, to build the power station near Braemer.
Construction is expected to begin in August 2007, with commissioning to occur in the fourth quarter of 2009 and ramping up to full commercial operation in the first quarter of 2010, the company said.
It will be the second power plant to be constructed at Origin's Spring Gully site, where it will consume 44 petajoules of coal seam gas per year when fully operational.
Gas for the plant will be supplied from Origin's Spring Gully and Walloon CSM fields. The development of these fields, associated pipeline infrastructure and other project costs will be about $500 million.
Managing director Grant King said this development would result in one of the most competitive power stations in the national electricity market because it would use CSM that Origin owned, as well as its competitive location and a low life cycle cost for the power station.
"The power station will be able to operate from intermediate to full baseload capacity, and it will emit about half the greenhouse gas emissions that a coal-fired power station using current technology would create," King said.