Brisbane, Apr 11, 2008 (ABN Newswire) - Queensland Gas Company (ASX: QGC) Managing Director Richard Cottee and Queensland Premier Anna Bligh held talks in India today on the potential for QGC to develop coal seam gas opportunities in India.

The world-scale liquefied natural gas (LNG) alliance between QGC and BG Group, completed in Brisbane today, includes an opportunity for QGC to enter into a joint venture in India, covering exploration, evaluation and potential development.

QGC's technical expertise, which has contributed to the success of the Company's coal seam gas wells in the Surat Basin in Queensland, would be used to identify the best opportunities in India.

India's increasing demand for natural gas is most likely to be met by LNG with imports forecast to reach 10 million tonnes in 2015 and 31 million tonnes in 2025, according to a 2007 ABARE report for the Australian Government.

Presently, most of India's natural gas is sourced domestically.

Mr Cottee, Ms Bligh and Kapil Garg, Managing Director of BG India, met today at BG House in Mumbai, India's commercial capital. They also discussed the environmental benefits of natural gas, particularly compressed natural gas (CNG), the fuel for thousands of vehicles in Mumbai and other cities. The CNG could also be developed from coal seam gas.

Mr Cottee said that with the fourth largest proven coal reserves in the world, India offers excellent potential for QGC. He said that India's coals appear to be favourable for coal seam gas projects.

"India's economic growth is nothing short of stunning. The country's appreciation of the benefits of gas to help fuel this growth provides an opening for QGC,'' Mr Cottee said.

In Brisbane for the signing of documents to complete the $870 LNG alliance with BG Group, QGC Chairman Bob Bryan said he was excited by the prospects in India where opportunities for coal seam gas can be optimised.

The increasing use of CNG in India has had a marked impact in improving the air quality in cities, and particularly Mumbai. Vehicles which use CNG produce fewer emissions than diesel-powered vehicles.

A further benefit for the city's motorists is that the running costs of a CNG-powered vehicle are less than half those of a petrol-powered vehicle.
The Indian Government supports the development of CNG as an alternative fuel in India. In 2006, a unique governmentbacked initiative provided personal accident insurance cover for the drivers of CNG taxis and auto-rickshaws. Queensland Premier Anna Bligh said the efforts being made in India showed how natural gas can be used by commuters to reduce pollution and lower the risk of health problems.

"Seeing first-hand the extent of gas-powered vehicles in Mumbai has been a real eye-opener, and it is proof of what can be done in the short-term to cut emissions,'' Ms Bligh said.

BG Group owns about half of Mahanagar Gas Limited (MGL), India's largest natural gas company with more than 530,000 customers.

MGL owns and controls almost 2,500 km of pipeline and is extending its network beyond Mumbai, Thane, and Mira Bhayander into the neighbouring city of Navi Mumbai.

Through its subsidiary, Gujarat Gas, BG Group supplies an additional 50,000 CNG customers in cities in Gujarat.

Company Profile

Queensland Gas Company is a rapidly-evolving integrated energy business strategically positioned to meet rising demand for its abundant coal seam gas, cleaner power and ample water.

Since listing on the Australian Stock Exchange in 2000 QGC has become Australia's leading coal seam gas producer, Queensland's third largest company, and an award-winning business noted for nimble and innovative action.

QGC's world-class reserves in the Surat Basin are projected to supply around 20 per cent of the Queensland domestic gas market in 2009.

QGC's strengths are underpinned by Queensland Government policy, firm long-term contracts, Australia's move to cleaner, more efficient fuel sources, and the advent of a national carbon trading scheme.

The qualities and depth of QGC's assets and management have been recognised by Britain's BG Group (formerly British Gas), a global energy company seeking to partner with QGC to export gas to higher value overseas markets.

In February 2008 QGC and BG Group announced a joint commitment of about $8 billion to enable the annual export of 3-4 million tonnes of liquefied natural gas (LNG) for 20 years. In April 2008 QGC received $664 million from BG Group as part of the transaction.

The LNG project involves targeting more than 7,000 petajoules (PJ) of 2P (proved and probable) gas reserves, construction of a 380 kilometre pipeline to the city of Gladstone, development of an LNG terminal, and several thousand new jobs.

Next year QGC will join the National Electricity Market. In February 2009 QGC will start supplying gas to QGC's new Condamine Power Station, which will produce 140 megawatts of electricity with minimal greenhouse emissions.

QGC invests in applications for large volumes of water yielded during the release of coal seam gas. The water has the potential to help drought-affected communities, towns and farms in the Surat Basin.

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