The CSM producer told the market yesterday that it has signed a long-term arrangement with the Murilla shire council to supply more than half a billion litres of potable water each year to the town of Miles.

For its part, the council will construct an 8km pipeline linking QGC’s plant at Condamine power station to the Miles water supply network.

Pending approvals, construction of the pipeline is scheduled to begin soon, with first water supplies to be delivered to Miles in early 2009.

Under the 20-year deal, QGC will provide up to 1.5 million litres of purified water a day to the town using proven reverse osmosis technology.

According to QGC, water from CSM operations compares favourably with much of the bore water from the Great Artesian Basin, typically containing 1500-4000 parts per million of total dissolved solids.

In 2006, QGC completed a reverse osmosis trial at its Berwyndale South production facility confirming that drinking water can be produced from harvested water.

QGC managing director Richard Cottee said the company was committed to finding beneficial uses for its abundant water supplies, which would otherwise have been lost in evaporation ponds.

“Queensland’s Surat Basin region has long been a land of extraordinary resources and harsh extremes,” Cottee said.

“Even if 2008 brings flooding rains, locals and farmers know only too well they could be facing parched fields and water restrictions again within a few seasons.

“Making beneficial use of the harvested water as a result of coal seam gas operations will provide certainty of supply to the Miles residents for at least the next 20 years.”

QGC’s agreement follows in the footsteps of a similar deal struck by Arrow Energy, which has agreed to supply the Dalby township with recycled water from its Tipton West field.

Origin Energy is also moving to build a reverse-osmosis plant, drawing on water from its Spring Gully CSM field near Roma.