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AGL Energy Limited 88
Produced water
Deep groundwater is brought to the surface (or
‘produced’) as an unavoidable by-product of upstream
gas exploration and production activities.
Coal seam gas projects
Community and government stakeholders are increasingly focused
on the potential loss of water resources and contamination of
ground or surface water arising from the activities of Australia’s coal
seam gas industry. At AGL, water management is a key component
of coal seam gas exploration and production projects, and all of
AGL’s coal seam gas activities are designed to have a minimal impact
on the environment and to protect water resources.
Before the gas can be brought to the surface, water that exists
within the coal formation must first be removed so that the gas
can ‘flow’ and be extracted. The quantity of water produced varies
depending on the location of the project and also the stage of the
production cycle of any given well. Some locations, due to the
inherent characteristics of the geology, produce greater volumes
of water per well than similar scale projects located elsewhere.
As a project moves from the exploration stage to the production
stage, the number of wells increases substantially. The total volume
of water removed from the coal formations increases in the initial
years then decreases again as the wellfield reaches maturity.
Currently, only AGL’s Camden Gas Project in New South Wales is
in commercial production stage. In the future, as some of AGL’s
exploration projects move into production stage, the volume of
produced water from AGL’s operations will increase.
The quality of produced water also varies depending on the location.
Produced water varies from low salinity (for example in the Galilee
Basin) to moderate salinity in some locations such as in the Hunter,
and at Camden and Gloucester. The salinity of produced water is
generally less than one-third that of seawater. It is safe to use for
a variety of purposes (most of which require some blending or
treatment to reduce the salinity hazard), and AGL is actively seeking
to increase the proportion of produced water that is beneficially
reused for environmental or commercial purposes.
To prevent shallow beneficial aquifers from being connected to the
deep coal seam gas water bearing zones, AGL uses internationally
accepted well construction practices. AGL has dedicated
groundwater monitoring networks to test the water level and the
water quality characteristics of shallow aquifers used for water
supply, to identify any changes during coal seam gas exploration
and production programs. Surface water monitoring is also in place
where there are surface water bodies nearby.
Conventional oil and gas projects
Conventional oil and gas exploration and production has been
undertaken in Australia for over 60 years, and technology related
to all petroleum exploration and production (both conventional
and unconventional) has grown from conventional oil and gas
The extraction of gas and hydrocarbon liquids from conventional
oil and gas projects requires drilling wells to intersect the target
reservoir, usually a section of sandstone that is disconnected from
any beneficial water aquifer by hundreds and sometimes thousands
of metres. Hydrocarbons produced are either free flowing, or use
artificial lift methods (i.e. pumping).
Water produced from conventional projects is significantly lower
than CSG operations and generally increases as oil production
declines. In October 2012, AGL acquired two conventional projects
in Queensland, one oil and gas project at Silver Springs (including the
Silver Springs Gas Storage Project) and one oil exploration project in
the Cooper Basin.
The water generated from both these projects is handled through
traditional technologies and is managed to prevent impact to both
surface and subsurface environments. Water quality is somewhat
variable and highly dependant on the source reservoir. Treatment
of this water prior to storage and disposal options includes removal
of hydrocarbons where necessary. Long term water management
strategies can include evaporation ponds and reinjection to depleted
oil and gas reservoirs.