Brisbane, May 27, 2008 AEST (ABN Newswire) - Queensland Gas Company (ASX:QGC)(PINK:QGSCF) today announced an agreement with two joint venture partners to examine the feasibility of building and owning a new gas-fired power station in New South Wales - to be supplied from QGC's coal seam gas reserves in southern Queensland.
The project would supply electricity to between 320,000 and 500,000 homes and create 400 to 600 jobs.
The gas for the power station would be transported by a new underground pipeline to be constructed as part of the Queensland to Hunter Gas Pipeline Project. QGC would be a significant foundation customer with the pipeline starting at QGC's Berwyndale South processing plant near Chinchilla and stretching 820 kilometres to Newcastle.
The NSW Government's proposals to restructure parts of the State's electricity sector provided the impetus to QGC to prepare for a major investment in new gas-fired power generation.
"QGC can play a significant part in powering the future of New South Wales,'' QGC Managing Director Richard Cottee said today.
"We are confident that the proposals by the NSW Government to change the landscape for the future of power generation will have widespread and long term benefits.
"A new power station of this size would be a win for NSW electricity consumers and a significant boost for QGC as it pursues integrated energy opportunities. It will also be very positive in terms of the nation's energy needs.
"From QGC's standpoint, a new power station and the accompanying pipeline would consolidate our position as a vertically integrated gas and electricity producer in major markets.''
The new combined cycle power station would have a capacity of 400 to 600 MW with first electricity targeted to be produced by mid 2012, subject to the necessary approvals. Depending on carbon pricing, the power station would take advantage of improved dry-cooling technology to use just 10 per cent of the water needs of existing coal-fired power stations in NSW.
Between 400 and 600 jobs would be created during the construction phase of the proposed power station. More than 20 full time staff would be employed during operations.
The power station is expected to satisfy new demand growth in NSW for three to four years based on forecasts of the 2007 Statement of Opportunities published by NEMMCO, market operator of the National Electricity Market.
The joint venture partners for the power station are ANZ Infrastructure Services Ltd (ANZIS) and Toyota Tsusho Corporation (TTC), with QGC holding a 60 per cent interest. The development costs are estimated at between $500 million and $750 million depending on the size of the power station.
As a foundation customer in the Queensland to Hunter Gas Pipeline project QGC would have contracted transportation capacity of 50 petajoules of gas a year for 20 years.
QGC Chairman Bob Bryan said the power station and pipeline, two critical infrastructure assets, would benefit energy consumers and QGC shareholders alike, and boost the gas and electricity markets in Eastern Australia.
"A greenhouse-friendly gas-fired power station, with less than half the emissions of a coal-fired power station, will provide a long-term solution to the needs of New South Wales for new electricity generation capacity,'' Mr Bryan said today.
"Our contingent coal seam gas reserves are both growing and being upgraded all the time, and we look forward to using this energy to help power New South Wales.''
QGC, an integrated energy company, focused on achieving market diversity and commodity arbitrage benefits; and the agreement announced today would deliver on both.
ANZIS Managing Director John Clarke said the agreement for a proposed NSW power station follows the successful alliance between ANZIS and QGC for the gas-fired Condamine Power Station, which is currently under construction.
"We are delighted with the outcomes of our ongoing relationship with QGC,'' Mr Clarke said. The 140 MW Condamine Power Station near Miles in Southern Queensland is scheduled to start delivering electricity within the next 12 months.
The location for the NSW power station will be the subject of further discussion with government authorities.
For further information on QGC visit www.qgc.com.au
Contact
Information for media:
Mr Hedley Thomas
General Manager
Communications and External Relations
Direct: + 61 7 3020 9043
Mobile: +61 417 797 419
E-mail: hthomas@qgc.com.au
Information for Investors:
Mr Ian Davies
Chief Financial Officer
Direct: + 61 7 3020 9040
E-Mail: idavies@qgc.com.au
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