There is significant interest in the development of a liquefied natural gas (LNG) sector in Queensland based on processing coal seam gas (CSG). As the CSG-LNG sector presents both opportunities and challenges for the state, the Queensland Government is conducting a review to help shape its policy response.

What is CSG?

CSG is generally 95–97 per cent pure methane (CH4).  Methane is a colourless, odourless and non-toxic compound that is generally held in the coal seam by pressure, typically provided by water. The amount of gas present in a coal seam depends on the depth of the seam, the thickness and the extent to which the fracture system is interconnected.

Why is there a growing interest in CSG?

In light of recent LNG proposals Queensland now has the opportunity to establish a LNG sector to capitalise on the global trend towards more environmentally-friendly fuels. Several factors are assisting Queensland in developing a LNG sector including:

• the presence of a global LNG market
• technology improvements enabling CSG’s conversion to LNG
• recent CSG reserve forecasts predicting Queensland’s production capacity will exceed domestic demand.

How does CSG differ from conventional gas?

Chemically, conventional gas and CSG are similar. CSG is almost pure methane—conventional gas is around 90 per cent methane with much of the remainder comprising ethane, propane and butane. Conventional gas also often contains higher carbon monoxide levels than CSG.

The second difference is geology. Conventional gas reservoirs largely consist of porous sandstone formations capped by impermeable rock, with the gas stored at high pressure and flowing to the surface spontaneously through production wells at a high-flow rate. CSG is entirely infused into the coal and production requires the drilling of many wells with each one less productive than a typical conventional gas well.  CSG wells are also typically shallower than conventional wells and cost much less to drill.

How is CSG produced?

When a CSG well is drilled it is usually hooked up to a pump to remove the water in the coal seam. As water is removed, the pressure reduces and the gas begins to flow at an increasing rate and remains steady for several years.

A generalised production profile is illustrated below.

Source: Department of Natural Resources and Water, Facts Mine Series, 2006

At the surface, the CSG is processed with water and other impurities separated. The gas from several wells is then collected and piped to a central compressor station and added to a high pressure pipeline network where it may be mixed with conventional and coal seam gases from different fields and then delivered to users.

There is a widespread view that production from CSG wells must be continuous, that is, if production is halted, water will re-enter the seam and the dewatering process must begin again. There are some fields in the Surat Basin that are able to be manipulated with production decreased or stopped for a period with little or no reduction in production, however, this is not a regular situation.

Where is CSG found in Queensland?

CSG has been produced in the Bowen and Surat basins since 2000. In the period to June 2007, CSG production was about 646PJ¹  with 97 per cent coming from the Bowen Basin.  However coal seam gas production from the Walloon coal measures in the Surat Basin is now growing rapidly.

While proximity to existing infrastructure such as pipelines has been important for exploration, the growing maturity of the sector and demand for gas has seen explorers working in more remote locations. 

The map below provides the location of gas resources, with the Cooper Basin being a conventional resource and the other basins showing both conventional and coal seam gas resources.

Source: Department of Natural Resources and Water, Facts Mine Series, 2006

What characteristics of coal impacts on CSG production?

Coal permeability and the ability of gas to flow within the coal, are significantly affected by water pressure, but the relationship is not uniform. Some coals shrink when drained of water increasing permeability, but others do not and can be self-sealing.  The significant variability of coal characteristics even within a single seam, means that many wells are required to adequately map and produce CSG.

How much gas is extracted per well?

The amount of gas present in a coal seam depends on variables such as the depth and thickness of the seam. Similarly, the amount of gas that is able to be extracted at each well varies between sites.

For example, wells in the Fairview field in the Bowen Basin, produce approximately 0.74 terajoules (TJ)² of gas per day or 270TJ per year. In comparison, wells at fields in the United States such as Cedar Cove in the Black Warrior Basin, produce around 0.11TJ per day (40TJ per year), while wells in the Ignacio Blanco field in the San Juan Basin, USA extract around 1.6TJ per day (580TJ per year).

How much water is produced per well?

The volume of water extracted with CSG is also highly variable between fields and wells.  For instance, production in the Bowen Basin results in the extraction of around 0.063 gigalitres (GL) of water for every PJ of gas, whilst in the Surat Basin around 0.26GL of water is extracted for every  PJ of gas. These figures are representative only and actual produced water volumes can vary significantly across individual sites. Further work is proposed to assess production levels.

How is gas transported?

Over short distances both conventional and CSG gas are transported through pipelines. However this is not practical across long distances. Instead the gas is chilled to -162°C in order to liquefy it. This product is known as liquefied natural gas (LNG) and is about 1/600th of the volume of the gas, meaning it can be shipped economically around the world in specialised cryogenic tankers. These tankers maintain the low gas temperatures necessary to ensure the gas remains in a liquid state. The LNG is then warmed and returned to a gaseous state for use at its destination.

What are the main costs of producing and selling CSG?

The main costs associated with CSG production include:

• securing land access
• exploration (drilling and completing production wells)
• compressing the gas
• processing, treatment and storing the CSG water
• pipeline tariffs (usually directly related to the distance of the gas field from customers).

What are the environmental impacts?

There are a number of environmental impacts that need to be considered for each CSG project and for the CSG sector as a whole. These include:

• groundwater impacts including the impact on surrounding aquifers
• by-product water - large volumes of saline water created in CSG production needs to be treated and disposed of
• surface impacts - exploration and linear infrastructure development associated with the production and transport of CSG has the potential to impact upon the native flora and fauna
• greenhouse gas emissions.

How does underground coal gasification (UCG) differ from CSG?

UCG is a process by which coal is converted in situ to a combustible gas that can be used as a fuel or chemical feedstock. The UCG process involves drilling two boreholes into a deep coal seam and the injection of an oxidant (air or oxygen and/or steam) down one hole. The coal is ignited and gasification is maintained by continuous oxidant flow. The product gas is then recovered from the second hole. While CSG involves the removal of the embedded gas leaving the coal seam intact.

Contact the LNG projects team

tel:        +61 7 3404 8206
email:    lng.team@dip.qld.gov.au
post :    LNG Industry Unit
Department of Infrastructure and Planning
PO Box 15009, Brisbane City East QLD 4002

¹ A PJ is a petajoule (or 1015 joules) and is used to express energy consumption by large customers such as cities or major industries, or cumulative output from commercial energy production facilities.  As a rule of thumb 55PJ of CSG is required to produce one million tonnes of LNG.

² A TJ is a terajoule (or 1012 joules)

Print version

Coal seam gas   251 KB