Coalbed methane gas from the Moranbah Gas Project could become an important power boost to regional Queensland following the official opening yesterday of a 12 Megawatt power station in Moranbah, central Queensland.

The gas-fired power station will provide power to Moranbah and surrounding areas with surplus electricity generation to be injected into the grid, said CH4 managing director and CEO Louis Rozman.

“We are optimistic that this unique approach to onsite power generation will ultimately be a model for similar developments throughout regional Queensland,” Rozman said.

“The potential exists for other onsite power stations to be constructed in energy-starved regional markets which are close to gas reserves.”

The Moranbah Gas Project – a 50/50 joint venture between operator CH4 and BHP Billiton – will provide gas to be used by Ergon Energy (“Ergon”) to generate electricity from the new power station. Ergon has contracted for up to 1.2 PJ of gas per year for 15 years, through to January 2020.

Electricity production to power the Moranbah area from the first 6MW of the 12 MW power stations commenced in late 2004 and commissioning of supply from the second 6MW station was completed in April 2005.

Meanwhile, Origin Energy’s $A870 million Queensland Spring Gully power station - a 1,000 MW coalbed methane-fired plant to be located 80km north-east of Roma - is a step closer to completion with the finalisation of the terms of reference for its environmental impact statement (EIS).

The Queensland State Development and Innovation Department is working with Origin on the EIS, which is expected to be completed in August. If the project goes ahead, it is expected to produce 500MW in its first stage, with another 500MW of capacity coming on-line later.

“Spring Gully would make a statement about Queensland’s ability to simultaneously address the need for electricity and the need for reduced greenhouse gas production in power generation,” state development and innovation minister Tony McGrady said.

“In addition to low greenhouse gas emissions, this project has the advantage of drawing its cooling water from the wastewater produced from the extraction of coal seam gas. This would significantly reduce the site area the gas project requires for evaporation ponds plus remove the need for new sources of cooling water."