“The recent decision by Enertrade in relation to the Townsville South Power Station Project is not affecting in any way our current operations, or our current gas sales agreement with Enertrade,” managing director/CEO Louis Rozman said.

“CH4 is continuing to explore a number of other growth opportunities.”

Enertrade has said there was not enough demand to justify two new power stations in the Townsville region, following AGL’s decision to open a A$350 million facility to coincide with first gas from the PNG pipeline in 2009, announced last Friday.

CH4 said under the current gas supply contracts with Enertrade and Ergon, deliveries of gas from the Moranbah Gas Project were expected to grow from 13 petajoules per annum this year, to about 17 PJ pa in 2006, and to about 20 PJ pa in 2007.

The MGP is currently producing more than 41 TJ per day, or over 15 PJ per annum, with majority sales to Enertrade and Ergon on a daily basis of 39 TJ per day, or 14.25 PJ pa. This is in excess of current contractual requirements, CH4 said.

The company recently entered into a memorandum of understanding with Alinta Limited, under which Alinta and CH4 will cooperate on power generation and associated infrastructure projects in the Bowen Basin. It said a scoping study and heads of agreement for an initial project area was on schedule.

In August 2005, CH4 announced a significant reserve upgrade at the Moranbah Gas Project, increasing 1P reserves from 10PJ to over 138PJ from its 2P reserve of 382PJ and 3P reserve of about 1,600PJ.

CH4 said it had also recently undertaken a significant exploration program to delineate further reserves.