The new power station is to incorporate up to 10 3MW Jenbacher gas engine-driven generators. These will be installed progressively as coal seam methane production ramps up during 2008-09, Eastern Star said.

In addition, the existing Wilga Park Power Station would be expanded to 10MW, giving a total 40MW of gas-fuelled generating capacity across the two power stations.

According to Eastern Star, the total gas requirement for the two stations would be about 11 terajoules per day.

Managing director David Casey said the new power station would allow monetisation of CSM from existing and proposed production pilots at Bohena, Bibblewindi and Dewhurst.

Casey said approval for the installation of the new power station and a flowline to deliver gas to Wilga Park was being finalised.

"Provided approvals processes are completed in a timely manner, the first of the new 3MW generating units will be in operation early 2009 with subsequent units installed at Eastern Star's option as gas production grows," he said.

The first stage of the new power station development is part of the company's existing fully funded work program, according to Casey. He added that funding for subsequent development stages would be arranged as required.