Content maintained by Ron Sait
Coal Bed Methane |
AIMR 2008 |
Coal Bed Methane
Coal Bed Methane (CBM) is a naturally occurring methane gas that is formed during the coalification process in which organic matter is converted into coal. Usually the methane is mixed with carbon dioxide, other hydrocarbons and nitrogen. CBM also is referred to as Coal Seam Methane (CSM) and Coal Seam Gas (CSG). Methane which is produced or released as part of coal mining operations is called Coal Mine Methane (CMM)
CBM is similar to conventional natural gas and is used to power water heaters, stoves and space heaters, both domestically and commercially. CBM is used also as a fuel at industrial facilities and to generate electricity. Water is produced as a by-product of CBM production but its reuse is dependent on a number of factors including its quality, the cost of treatment required and pipeline infrastructure. Water of suitable quality can be used for domestic purposes, aquaculture, recharging aquifers, wetlands, recreational lakes or at mining operations and power stations. Poor quality water may be required to be contained in storage ponds.
Resources
As at December 2007 the proven and probable (2P) reserves of CBM in Australia were 7,500 Petajoules (PJ), a 61% increase on the 2006 2P reserves of 4,640 PJ. The life of the resource is more than 65 years at the current extraction rate of 110 PJ. Queensland has 7,050 PJ (or 94%) of the 2P reserves with the remaining 450 PJ in NSW. Note that there are no CMM reserves.
Exploration Expenditure
Data relating to exploration expenditure are not published by the ABS on either a State or National basis. During 2006-07 CBM exploration in Qld continued at record levels with 392 CBM wells drilled compared to 171 conventional oil and gas wells. Exploration in Qld continues to concentrate on the Bowen and Surat Basins while in NSW exploration continues in the Sydney, Gunnedah and Clarence-Moreton Basins and all have 2P reserves. Other prospective basins include the Gloucester, Galilee, Murray, Perth, Ipswich, Maryborough and Otway Basins.
Production
In 1995 there was no production of CBM in Australia and by 2003 there was only 20 PJ in 2003. However, by 2006 CBM production had risen to 75 PJ and increased by a further 46% in 2007 to 110 PJ. During 2007, Queensland produced 105 PJ or 95% with the remaining 5% being produced in New South Wales. CBM production was 48% of the total Queensland gas production during 2007. According to the independent industry commentator, Wood Mackenzie, CBM could provide up to 50% of the Australian east coast gas supply by 2020. Note that CMM is not counted in CBM production statistics.
Industry Developments
Queensland CBM and CMM developments include:
Energy Developments Ltd: A $60 million 40 MW CMM power plant is currently under construction at the Moranbah North Colliery. Commissioning is expected in 2008.
Arrow Energy: In February 2007 the Tipton West CBM operation started supplying about 6 PetaJoules per annum (PJ/a) to the Braemar Power Station. In April 2007 Arrow signed an agreement with Liquegas Energy to supply 2 PJ/a over 15 years from the Daadine field for use in a proposed mini-LNG plant at the field commencing in 2009. The LNG is to be used by long haul trucks. In May 2007, Arrow announced plans to supply 55 PJ/a of CBM to an LNG plant at Gladstone with an initial capacity of 1 Mtpa in late 2010. Arrow and ERM plan to jointly develop the $545 million 450 MW Braemar 2 power station 40 km south west of Dalby.
Origin Energy: In April 2007 Origin announced plans to invest $53 million to expand CBM production at Spring Gully by another 20 TerraJoules/day as well as construct a reverse osmosis water plant. Origin is committed to a $780 million 630 MW gas fired power station on the Darling Downs using CBM from Spring Gully. Commissioning is expected in late 2009.
Santos Ltd: Santos announced in July 2007 a proposal to build a $5 to $7 billion LNG project at Gladstone with a capacity of 3 to 4 Mtpa. First shipments are expected in 2014.
Queensland Gas Company: In October 2007 construction started on a 135 MW power station at Condamine. In July 2007 the Argyle-Kenya CBM field in the Surat Basin commenced supplying Incitec Pivot at a rate of 7.4 PJ/a. In February 2008 Queensland Gas and the BG Group announced a commitment to a long term alliance for the development of an $8 billion LNG plant at Gladstone with a capacity of 3 to 4 Mtpa over 20 years from 2013.
Sunshine Gas: In August 2007 the Lacerta CBM field in the Bowen Basin was declared commercial. In December 2007 Sunshine Gas signed a Heads of Agreement with Sojitz Corporation to build a 500,000 tpa LNG plant at Gladstone using Lacerta CBM as a feedstock. First production is expected in 2012.
New South Wales CBM and CMM developments include:
Metgasco Ltd: Metgasco plans to build a 30 MW power station at Casino fuelled by 2.5 PJ/a of CBM over 15 years. Metgasco also plans to provide the CS Energy Swanbank Power Station in Ipswich with 18 PJ/a of CBM. In December 2007 Metgasco signed a memorandum of understanding with BP to supply over 15 PJ/a of CBM to the Bulwer Island oil refinery.
Sydney Gas: In 2006-07 two new compressors were installed at the Rosalind Park Gas Plant increasing the capacity to 26 TerraJoules/day.
Eastern Star Gas: In March 2007 Eastern Star announced an investigation into supplying up to 500 PJ of CBM to the Bayswater Power Station from the Gunnedah Basin project. In November 2007 Eastern Star signed a MoU to supply 40 PJ/a of CBM to Babcock and Brown's proposed power station in northern NSW.
Envirogen Pty Ltd: In 2007 the Glennies Creek CMM operation commenced, supplying gas to a 10 MW power station.
BHP Billiton: In 2007 the 5 MW $30 million West Cliff Ventilation Air Methane Project was commissioned. The plant burns waste coal mine gas using VOCSIDIZER technology.
