Department updates

February 2016

In February 2016, AGL announced it will not proceed with the Gloucester Gas Project. AGL will commence an extensive decommissioning and rehabilitation program for its well sites and other infrastructure in the Gloucester region. For further information please go to the AGL website.

10 June 2015

Extra conditions have been imposed on AGL Upstream Investments Pty Ltd (AGL) in relation to the disposal of flowback water from its Waukivory Pilot Project near Gloucester.

AGL requested an amendment to its Review of Environmental Factors (REF) to move flowback water to the Tiedman East Dam.

The REF has been granted provided that by 3 August 2015, AGL meet the original condition that a third party licenced waste contract be in place to remove and lawfully treat flowback water.

If that condition is not met, AGL must have a water treatment plant on site by 2 November 2015 and all flowback water treated and removed by 31 December 2015.

The request and approval letter is publicly available on the report summary and document list page in the DIGS database.

19 May 2015

An investigation into the detection of BTEX chemicals in flowback water from AGL's Waukivory Pilot Project near Gloucester has been completed with no sustained findings against the company.

On 27 January 2015, AGL Upstream Investments Pty Ltd reported elevated levels of BTEX chemicals in a water sample from one of its wells. Operations were voluntarily suspended while further samples were taken from the three other wells and separate investigations by the Division of Resources and Energy and the Environment Protection Authority (EPA) began.

The NSW Government bans the use of BTEX chemicals in the fracture stimulation of coal seams because of their potential danger to human health if they occur in high enough concentrations for prolonged periods of time.

The investigation looked at a number of factors including AGL's fracture stimulation methods, its surface and groundwater plans, its water sampling methods and the geology of the Gloucester Basin. The region contains extensive coal deposits in ancient formations that hold traces of oil.

Investigators could find no evidence that BTEX had been used by AGL in any fracture stimulation fluid or drilling process.

The evidence gathered during the investigation found the source of BTEX in the flowback water is from naturally occurring groundwater within the deep coal seams which are in excess of 600 metres below the surface.

There is widespread independent literature confirming that BTEX can occur in groundwater found in deep coal seams with similar geological formations.

There is no evidence of BTEX being detected in aquifers close to the surface.

The findings were sent to the University of Queensland for independent review by specialist researchers who reached the same conclusion of naturally occurring BTEX and they reported that fracture stimulation activity did not impact the water quality of the shallow aquifers.

With the investigation now completed and no adverse findings, AGL is entitled to resume operations. The company has an application to change the manner in which flowback water is disposed of and that application is currently under consideration by the relevant agencies.

Following are documents relating to the Department's investigation:

29 April 2015

The Department received a request on the 26 April 2015 from AGL Upstream Investments Pty Ltd to allow the company to collect and analyse gas and water samples via the recommencement of pumping flow-back water for a limited period. On 29 April 2015, the Department authorised AGL Upstream Investments Pty Ltd to recommence pumping flow-back water at the Waukivory Pilot Project site in accordance with its current approval and other conditions. Read the Department's letter of response to AGL PDF [45 KB PDF].

8 April 2015

The NSW Office of Coal Seam Gas (OCSG) has approved AGL to undertake operations to decrease the gas pressure in its four suspended Gloucester pilot wells, subject to strict controls.

Operations at AGL Upstream Investments Pty Ltd Waukivory Pilot Project were suspended in January 2015 after traces of BTEX compounds were detected in flow back water. Investigations and testing are continuing on this matter.

On 2 April 2015, the OCSG received an application from AGL to decrease gas pressure in the four wells that are currently subject to a suspension notice. After imposing tight conditions the OCSG has authorised the company to undertake work to release the build-up of gas that has accumulated since the pumping of flowback water from the wells was suspended.

Conditions imposed include:

  • Gas must be released slowly by moving it from the wellheads through a pipeline to the flare for controlled combustion to prevent methane escaping into the atmosphere.
  • A wellhead control system must be used in accordance with recognised safety systems.
  • Gas release rates are to be kept to a minimum and all volumes released must be recorded.
  • AGL must ensure the activity will not involve the pumping of water or any movement of water from the wells.

AGL is required to advise the OCSG and the NSW Environment Protection Authority (EPA) prior to commencement and completion of the work. The company has also been instructed to inform the community of the planned authorised works.

Compliance officers from the OCSG and the EPA will monitor the activity. The community is advised there will be flaring of gas required at the pilot wells. This will be conducted in accordance with any requirements in the company's environment protection licence and the Clean Air Regulations.

AGL advises the operation is expected to take approximately two weeks to complete and the wells will be suspended again upon completion of the work. All other activity at the Waukivory Pilot Project remains suspended.

17 February 2015

The Division of Resources and Energy was advised on Tuesday 17 February 2015 by AGL that the company needed to make an application to change its management for flowback water.

Operation of the AGL Waukivory Project cannot proceed until these matters are considered.

Flowback water must be managed correctly as part of the company's approval for activity.

Investigations into traces of BTEX chemicals at the site by the Division and the Environment Protection Authority are continuing after AGL notified the Government of the presence of BTEX chemicals in water samples from one of its wells.

This matter was reported to the Government on 27 January 2015.

August 2014

In September 2013, AGL applied to fracture stimulate four existing wells, known as the Waukivory Pilot Project, within PEL 285.

In August 2014, the Office of Coal Seam Gas (OCSG) granted an activity approval. In making its decision the OCSG obtained advice from the Environment Protection Authority (EPA), the Office of Environment and Heritage, the NSW Office of Water, the Department of Primary Industries and an independent expert.

AGL's application included a Review of Environmental Factors, an Agricultural Impact Statement, a Fracture Stimulation Management Plan, Air Quality Impact Assessment, Surface Water and Ground Water Plan, Environmental Management Plan, Health and Safety Management Plan, Ecological Assessment of Wells and Pipeline, Risk Assessment, Human Health and Ecological Risk Assessment, Noise Assessment and an Environmental Incident Response Plan.

AGL also obtained an Environment Protection Licence from the Environment Protection Authority.

AGL must carry out the activities in accordance with the following requirements; the Petroleum (Onshore) Act 1991, Work Health and Safety Act 2011, PEL285 licence conditions, relevant codes, including the Codes of Practice for CSG Well Integrity and Fracture Stimulation.

The OCSG inspects and audits coal seam gas exploration to determine that activities are compliant with licence conditions and legislation.

Facts about the Waukivory Project

The NSW Government approved the renewal of AGL's Gloucester Petroleum Exploration Licence (PEL) 285 for six years.

PEL 285 provides for AGL Upstream Investments Pty Ltd (AGL) to explore for coal seam gas within the Gloucester Basin. AGL has relinquished 25% of its PEL.

The Gloucester Exploration and Appraisal Project must now meet tighter licence conditions in relation to community consultation, groundwater monitoring and modelling, produced water management, well integrity and fracture stimulation.

The Office of Coal Seam Gas has granted an activity approval and approved AGL's Fracture Stimulation Management Plan for four existing wells after obtaining advice from across the Government, including the Environment Protection Authority.

The project is known as the Waukivory Project.

Environment Protection Licence

AGL is required to obtain an Environment Protection Licence from the Environment Protection Authority (EPA).

Produced Water Management Plan

This is the plan that AGL, in consultation with the NSW Office of Water, must provide to meet the some of the license requirements of PEL 285.

It details how produced water — water taken in the course of prospecting — is handled, contained and in some cases, dispersed.

Flowback water

What happens for flowback water that returns to the surface after hydraulic fracturing? This water has high salinity levels that are not suitable for most treatment facilities.

Under the conditions of its licence, AGL must transport this flowback water to a facility that is licensed and approved by the EPA. Currently, AGL has contracted Worth Recycling to transport flowback water from the Waukivory Project to Worth's Windsor facilities.

Surface Water and Groundwater

The purpose of this plan is to provide a framework that describes how AGL will monitor and assess changes in surface water and the different groundwater systems in the Waukivory local area.

Inspections and monitoring

The OCSG undertook a thorough safety and engineering inspection of the Waukivory site prior to, and during fracture stimulation operations.

EPA officers also conducted inspections of the site to check compliance with environmental requirement including monitoring the water, air and noise.

Waukivory Pilot Project approval documents

View the documents in full below:

Gloucester Gas Production Project: Stage 1 (not commenced)

PEL 285 Renewal documents