Esso Australia's Gordon Keen said Australia's increasing dry climate and renewed community focus on water as a vital resource were prompting an increased focus on water conservation in the oil and gas industry.

Keen told the conference that ExxonMobil had set up water conservation teams at multiple Exxon sites in Victoria. Strategies developed by water conservation teams have reduced water consumption at Exxon sites by 1000 megalitres per year, equivalent to 400 Olympic-sized swimming pools.

"The key to water conservation are water conservation teams with wide membership to generate and share ideas on water conservation," he said.

"Motivated and empowered site water conservation teams can make a real difference. They identify a diverse range of water saving opportunities that don't have to be expensive to be effective.

"In one initiative, freshwater use at Altona Refinery was reduced by one megalitre per day. This was achieved through multiple initiatives such as optimising use of standby equipment and the frequency of flushing operations."

The water conservation teams have also helped reduce water consumption at Long Island Point by 40% from 5ML a day in 2001 to 3ML a day in 2006.

In contrast to ExxonMobil, coal seam methane producers are actually producing water through their operations.

Matthew Ames from Origin Energy said it is crucial to the ongoing and sustainable development of CSM as an energy source that viable markets for CSM water are developed.

The water will generally need to be treated for salinity and other impurities, he said.

Origin has built Australia's first fully integrated CSM water treatment facility.

Instead of building hectares of evaporation ponds to manage associated water, Origin commissioned the world's largest CSM water treatment plant, which produces 9ML a day, about 10% the capacity of Sydney's $1.3 billion desalination facility.

This achievement was recognised with an APPEA Environmental Award, presented to Origin on Wednesday morning.