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Press release 29 November 2010

 

QGC announces major water treatment plant and pipeline at Chinchilla

QGC Pty Limited, a BG Group business, has executed major water management contracts in south-west Queensland as part of its investment to develop coal seam gas for markets in Australia and overseas.

A consortium of GE Betz Pty Ltd and Laing O'Rourke Construction Pty Ltd will build a major water treatment plant and associated facilities near Chinchilla, and SunWater Limited will build and operate a pipeline to transport treated water from the plant to the Chinchilla Weir.

The water treatment facilities will benefit farmers, town residents and industry around Chinchilla, about 290 km west of Brisbane.

The facilities will treat water from the Walloon coal seams not usually used by local communities, and will be a new water source that can be used as a substitute for water from the shallower, distressed aquifers currently used for agriculture.

"QGC will produce water as a by-product of extracting natural gas from coal seams," said QGC Managing Director Catherine Tanna.

"This is water that is salty and would otherwise not be used.

"Our investment will make it possible to put this water to good use by treating it through leading-edge technology for use in agriculture and industry and it may supplement existing town supplies," she said.

The water treatment plant will have eventual production capacity of up to 100 megalitres a day which is equivalent to the current daily water use of about 20 average-size farms on the Darling Downs.

It will be built about 20 km south-west of Chinchilla, near QGC's "Kenya" gas processing plant.

The facilities will cost more than A$350 million and are integral to QGC's plans to develop coal seam gas for supply to the domestic market and for export as liquefied natural gas as part of the Queensland Curtis LNG Project.

QGC's investment in water treatment is part of its US$15 billion investment announced on 31 October 2010 following BG Group's approval of the Queensland Curtis LNG Project.

Through the GE-Laing O'Rourke consortium, Laing O'Rourke will build the plant and GE will provide technical expertise and process equipment, including advanced ultra-filtration, ion exchange, reverse osmosis, and brine concentration technology, as well as initial services when the plant is operating.

SunWater will build the 20 km underground pipeline from the water treatment plant to the Chinchilla Weir.

The water will be available to supply farmers along the pipeline route, to farmers and industry within the boundaries of the existing Chinchilla Weir Water Supply Scheme and it may also be used to supplement existing town supply.

The initial phase will involve construction of plant with capacity of 72 megalitres a day and is expected to be operating from October 2011.

Associated infrastructure will include a 33 megawatt gas-fired power plant to run the reverse osmosis process, and ponds and pipelines related to the water treatment facilities.

Notes to Editors:

CSG water

Coal seam gas is principally methane that is trapped in coal seams by water pressure. For gas production to begin, some of the water in the coal seam must be extracted, typically with a pump in the well or at the surface. As water leaves the coal seam, a change in hydrostatic pressure allows the gas to flow. Water production eventually declines as gas flow increases. Water is separated from the gas at the surface and transported via pipeline to storage ponds before treatment.

QGC

QGC Pty Limited (ACN: 089 642 553) is a leading Australian coal seam gas explorer and producer focused on supplying gas to domestic and international markets. QGC is establishing Queensland Curtis LNG, which involves expanding exploration and development in southern Queensland and transporting gas through a 540km underground pipeline network to Curtis Island near Gladstone where it will be liquefied.

Media contact:

Paul Larter +61 (400) 776 937

There are matters discussed in this media information that are forward looking statements. Such statements are only predictions and actual events or results may differ materially. For a discussion of important factors which could cause actual results to differ from the forward looking statements, refer to BG Group's annual report and accounts for the year ended 31 December 2010. BG Group does not undertake any obligation to update publicly, or revise, forward looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.