QGC - CSG water strategy ...

Excerpt from QGC Quarterly Report:

8. Water

QGC regards the management of water and its infrastructure as a significant part of QGC’s contribution to stakeholders, the environment and the community.

The Company is dedicated to sustainably managing all aspects of surface water and groundwater on its tenements.

We continue to monitor, plan and manage surface water in ponds and pipes and protect rainwater run-off from activities associated with our operations. Our extensive groundwater monitoring program has continued to demonstrate consistency of water quality and quantity from our operational wells.

We are pursuing the beneficial re-use of our associated water and have two re-use applications before Queensland’s Environmental Protection Agency for approval. We are preparing two more for approval, with others to follow as we find and develop methods of beneficially re-using produced water.

QGC is working with stakeholder groups on coal seam water and is engaged with government and regulators to achieve the objectives set out in legislation and policies.

One new policy is the Queensland Coal Seam Gas Water Management Policy, released in October by the Department of Infrastructure and Planning. We regard our investments in beneficial re-use research and leading-edge pond design as well-placed to ensure that we fulfil our commitment to managing water resources appropriately and sustainably.

QGC has prepared a strategic water management strategy, comprising plans and objectives for the environmental, social and commercial management of the produced water.

Our efforts to achieve these objectives have gained momentum this quarter, with a significant contribution from our commercial water team:

- Discussions to finalise a municipal water supply agreement with Dalby Regional Council have continued in the hope of providing potable water to local communities in the immediate future. QGC has also explored opportunities to provide raw water to neighbouring industry in an effort to reduce the stress on existing water
supply infrastructure.

- We are progressing with a laboratory trial and potential field trial of a bio-diverse constructed wetland biological filtration ecosystem. Evaluation work has begun on this project, with a final investment decision for a full-scale field
system due in the second quarter of 2009. Implementation is targeted for next spring. This project has the potential to rehabilitate marginal land and leave a sustainable, lasting and positive environmental legacy.

- QGC remains committed to becoming a leader in the application of world-class processing and treatment technologies for the beneficial use of coal seam water. QGC’s search for new technology to support the beneficial use of water has been global, including attendance at the world’s leading trade exhibition for water, Aquatech 2008. QGC continues to ensure that it considers both existing and promising new processing and treatment technologies.

- The CSG Water Future Taskforce of industry and local government has been convened in Queensland. QGC is playing a leading part in helping the group to identify and implement sustainable solutions to the processing of associated water and management of the valuable salt by-products.

QGC believes that a multi-disciplinary approach will provide the solution for the management and treatment of raw coal seam water. The Company’s solution will be visionary, sustainable, responsible and innovative.

See - QGC and water - Quarterly Report.