The companies have begun preliminary engineering and design work for the proposed 57MW power station to be located 30km south-west of Chinchilla, based on consumption of four Petajoules (PJ) of gas per year. QGC said it would build, own and operate the baseload power station.

First electricity sales to the National Electricity Market (NEM) are expected in 2007.

"Not only does QGC gain a customer, but we also diversify our revenue stream through sales of electricity and Gas Electricity Certificates to the (NEM)," said managing director Richard Cottee.

Thiess and Siemens will provide the plant design and technical documentation for the company to complete the pre-feasibility engineering, design, licensing and approval work as a pre-cursor to the completion of a definitive feasibility study for the construction of the power station.

The pre-feasibility study is expected to be completed in September at which point a decision to proceed would be considered.