CSG Overview.

CSG FACTS

• Coal seam gas is simply natural gas extracted at low pressure from coal
• Natural gas is a low-emission alternative to coal when used to generate electricity.
• Natural gas is the fuel of choice for Australians
• There are many myths and misconceptions about CSG
• CSG and agriculture/urban living can, and do sustainably co-exist
• Exploration and production processes for CSG are much less invasive than coal mining
• Exploration is not always success and does not guarantee that we can extract gas
• CSG resources can be developed in an ethical and environmentally sustainable manner

WHAT IS CSG?

CSG is a natural gas produced from coal. As an end-use product, CSG is the same as natural gas. It can be used in all natural gas appliances in your home and has commercial applications such as electricity generation.  Natural gas extraction has been part of Australia’s energy landscape for more than a century and offers Australia a low-emission alternative to coal when used to generate electricity.

The only difference between CSG and natural gas is in the way that it is formed by nature.   CSG is composed predominantly of methane and small percentages of nitrogen and carbon dioxide. The coal seam is both the source and the reservoir, which is different from the sandstone reservoirs of conventional oil and gas.   As coal forms over millions of years, large quantities of methane-rich gas are generated and trapped in coal seams by water and ground pressure. CSG is trapped within the coal and against tiny fractures, or cleats, under hydrostatic pressure. CSG is extracted at low pressure from coal.

CSG is formed as part of the same natural processes that produce coal over millions of years.  It is held in the coal by pressure and water.  Coal extraction is not required to recover CSG.  Coal has many fractures and a large surface area which means it can hold large volumes of gas.

WHY IS CSG IMPORTANT?

Dart believes that important CSG resources in NSW can be developed in a way that is sustainable and that can co-exist with all other land uses. CSG is safe, poses minimal impact on the surface environment, does not impact on agricultural and municipal aquifers and poses little risk to public health. Responsible development of the CSG industry will realise significant economic benefits for the people of NSW, largely in terms of job creation, additional revenue streams for government and reduced pressure on energy prices. In addition to the small environmental footprint of responsible CSG developments, there are significant global environmental benefits compared to other fossil fuels, thereby making natural gas a very necessary ‘transition’ fuel on the way to a world powered by renewable energy.

We have broken our CSG operations into 5 typical stages:

1. CONSULTATION

Our projects are based in different parts of NSW and affect communities in those areas differently.  Dart realises that the most crucial element to our success is our relationships with the community and landholders in which we operate.  
 
For Dart, community consultation is about being open and honest with communities and key stakeholders about our activities in their community.  It gives a voice to communities for us to listen to your needs, expectations and concerns.

For Dart, community consultation is an on-going process so you can be kept up to date about what is happening in your area. Before each of the steps below, consultation with relevant stakeholders will take place so that all parties are kept up to date on our activities.

2. ACCESS TO YOUR LAND

If you agree to let Dart operate on your land, we will negotiate a land access and compensation agreement with you.  This is document that both parties sign allowing access to your property and ensuring that you are compensated fairly for that access.

In addition, before we undertake any activity on your land one of our professional staff such as a Development Officer will discuss with you the upcoming work on your land.  Our staff will take the time to understand your land, how you currently use it and if you have plans to develop your land in the future.  We aim to ensure that our operations cause you, your family and your business minimal disruption and that we avoid any sensitive areas.   Our staff will work together with you to develop a plan for our activities on your land and address any concerns you may have.

Operations on your land may include a range of infrastructure such as access roads, drill rigs, wells and underground pipelines on your land. Not all of these activities may occur on your land, but sometimes additional infrastructure such as water storage and treatment facilities, and gas processing facilities may also be required.

Our staff conducts surveys of your land to assess the suitability of the location for a gas field and the 
associated infrastructure.  We will need your input so to make sure the location we select together meet your needs and ours whilst protecting sensitive areas.

Some of the issues we consider when assessing your land include:

Landholder feedback

• We aim to minimise disturbance and use existing access tracks, as well as determine what grids and gates are required
• Identify property infrastructure to be aware of e.g. yards, watering points and water bores

Field services

• Determine suitable areas and terrain to position well sites and associated infrastructure

Environment

• Ensure that we deploy the best practices with regard to weed management, vegetation to be retained, protection of animals and any other environmental issues relating to your land.

Cultural heritage

• Identify any cultural heritage issues

3. EXPLORATION & PILOTS

Exploration is about gathering detailed information to support our geological desktop studies so that we can understand the gas potential of the Sydney-Gunnedah basin.

If required we may undertake a Seismic Survey to understand the subsurface geology and structures. Once we have interpreted the seismic results we will then drill core holes.  Landholders and the community will be kept advised of how many core holes will be drilled at any given location. 

Dart exploration corehole site

Exploration

The drilling of core or chip holes lets us analyse the solid cylinders (core) of coal and solid rock so that we can understand the CSG content and location.  The core holes are usually between 10 and 30 cm in diameter and can be drilled up to 1500 meters deep. The coals seams we are interested in lie between 250 and 1000m beneath the earth’s surface.

Testing of the coal seams is conducted to determine the potential of the area for coal seam gas production.

If we locate a commercial gas reserve during the exploration stage, we may convert our core holes to be used in a pilot program and may undertake additional drilling.  If adequate reserves are not found, we plug the core holes with cement, seal them below ground level and rehabilitate the site. 

Pilot Testing

A Pilot program or Pilot Appraisal Program will aim to identify the commercial viability of the CSG reserves in the areas.  The program can consists of a small group of wells (up to 5) spaced  about 500 to 1,500 m apart which will target a specific coal seam which has shown CSG resource potential during the exploration stage.  Next a completion rig will install a pump, wellhead facilities. Dart staff will visit the well on a regular basis in light vehicles to carry out maintenance, undertake testing activities and collect data.

The testing will analyse the permeability of the coal seam, reservoir pressures, gas and water production and composition.  The results of these wells will contribute to the ongoing exploration and evaluation of the areas CSG resources in NSW.  Data collected as a result of the pilot wells will provide information on the area in relation to water quality, water rates, coal seam connectivity and directional permeability.

Aquifer Protection

Protecting aquifers during drilling is of the upmost importance to Dart. In NSW aquifers are protected by strong legislation, and industry best practice.  Each Dart CSG well is designed by an expert specialist engineer to ensure its structural integrity and safe operations. Our core holes are lined with a double layer of pressure cemented steel casing to make sure that any aquifer intersected is fully isolated from the well. Aquifers used by the farmers of the Gunnedah basin are about 80m below the surface.  Several layers of impermeable solid rock exist between the aquifer and the coal seam. We monitor water levels and quality, through specially drilled groundwater bores, at regular intervals, so that immediate action can be taken in the unlikely event that water resources are compromised.

Water Management

During the pilot stage, water is pumped out of the coal seams, this releases pressure and allows the gas to flow.  As the amount of water in each seam decreases, the production of gas increases. The amount of water produced from each well decreases over time.

CSG water is different to shallow aquifer water.  We may install on site facilities for storage of the water that is pumped out of the coal seam.  However the volume and quality of water produced during CSG at this stage varies greatly between areas and is controlled by geological factors.  Typical water volumes in the NSW are significantly lower than other CSG areas such as QLD. We employ water specialists to continually test this water so that we can understand how to treat it.  This water can be used beneficially on our site operations, in agriculture and irrigation or for industrial uses. If water produced from a Dart pilot or production well cannot be used it is responsibly disposed of and approval for us to do this must be given by the NSW Office of Water. 

4. DEVELOPMENT & PRODUCTION

During the process of proving up resources, which could take a number of years, on-going consultation, scouting and possible renegotiation with the landowners will occur.

In order to prove the actual gas reserves available exploration and pilot stages production wells are drilled to extract the gas. These new production wells are in addition to the existing pilot wells and are placed in a grid pattern. Depending on the area, the spacing can be between 500 and 1,000 metres apart. Existing pilot wells are often tied into the production well network and converted to production wells. Production wells are connected by underground water and gas pipelines called ‘gathering systems’. These systems connect via trunk lines to a main processing facility.  The gas and water extracted from the wells are separated. The gas is compressed at a central compressor station before being distributed to customers via a high-pressure pipeline. The water is usually stored in storage tanks. We use a variety of methods and technology to then treat the water and make it suitable for a range of uses.

Surface activities are rarely interrupted by CSG production operations.  Dart has no producing wells in NSW at this time.

5. MAINTENANCE AND REHABILITATION

We carry out maintenance for the life of all infrastructure to ensure environmental and safety standards continue to be met. Land rehabilitation is undertaken progressively throughout our operations and at the completion of our activities. This will include re-spreading topsoil and restoring vegetation.

Active CSG well which allows other activities to continue around it