But despite these successes, the company took a big hit in early November when AGL announced it would open a $350 million gas-fired power station in Townsville, North Queensland to coincide with first gas from the PNG pipeline in 2009.
The Queensland government promptly told Enertrade to stop work at the 400MW base-load Townsville South gas-fired power station project as there was not enough demand to justify two new power stations in the Townsville region. The Enertrade power station was to take gas from CH4.
While CH4 quickly issued a statement saying existing contracts were not under threat, that was not enough to stop a sharemarket rout from which the company has still not recovered.
Last year, the MGP produced 12.9 petajoules, of which 12.0PJ was delivered to Enertrade with the balance delivered to Ergon’s Moranbah Power Station. The other partner in the MGP is BHP Billiton.
The gas deliveries were used to fuel base load power supply requirements in Townsville, which helped Queensland meet its Cleaner Energy target of natural gas fuelling 13% of power generated in the State, according to CH4.
CH4 said production of almost 13PJ in its first year of commercial operation combined with daily production rates in excess of 41TJ per day by year-end, confirmed the MGP as the largest coal bed methane producing project in Australia.
Gas volumes planned for delivery this year is expected to total about 17PJ, while 20PJ is planned for 2007, according to CH4 managing director and CEO Louis Rozman.
“This is another excellent achievement for the Moranbah Gas Project, and another milestone delivered by CH4 and the coal seam gas industry,” Rozmand said.
“It is worth noting that the rate of gas production from the Queensland coal seam gas industry at the end of December 2005 totalled over 150TJ per day, a rate of approximately 55PJ per year, or half of Queensland’s current gas needs.
Rozman said CH4 continued discussions with customers for potential further gas sale contracts into the region, and the company continued delineating areas of potential additional reserve.
The MGP joint venture partners have a 15-year gas sales agreement with Enertrade to supply over 300 PJ of gas. The MGP has 382PJ of certified 2P reserves (proved and probable reserves).
