“In 2006, we were able to grow our coal seam gas production by 65% and we expect around 200% growth in coal seam gas over the next five years through an aggressive exploration and appraisal program,” he said.

Santos has CSM exploration acreage in Queensland’s Surat and Bowen

Basins, as well as major producing CSM fields at Scotia, Spring Gully and Fairview.

The company was widely criticised in 2005 for paying too much in its $600 million acquisition of Fairview.

Since buying Fairview from Tipperary Corporation, Santos has expanded the field’s processing and compression capacity, drilled and completed 25 new production wells, and built the $40 million Comet Ridge-Wallumbilla pipeline to overcome limitations in the existing pipeline infrastructure.

The company has also modified its Ballera gas plant in southwest Queensland to enable reversing the flow in the Ballera-Wallumbilla pipeline. This means CSM can now be supplied to customers in southern Australia.

Australia’s CSM industry has grown significantly over the last five years and it is expected that before the end of this year CSM will comprise 20% of eastern Australia’s gas supply.