AGL Energy Limited has today announced that it will cease the exploration and production of natural gas at sites across Queensland and New South Wales following a review of its operations.
The company sited “volatility of commodity prices and long development lead times” as the primary reason for the move.
The decision will impact AGL’s natural gas assets at Moranbah, Silver Springs and Spring Gully in Queensland. Apart from gas storage and related plant at Silver Springs, AGL expects to sell these assets.
“Due to difficult market conditions this may take some time,” a statement from AGL says.
“It is likely that the sale of Moranbah will require a cash payment in relation to onerous contract provisions previously booked.”
In NSW, AGL will not proceed with the Gloucester Gas Project and will cease production at the Camden Gas Project in South West Sydney in 2023, twelve years earlier than previously proposed.
There is no change to AGL’s commercial or retail gas activities.
Maranoa Regional Council Mayor, Robert Loughnan, said he was seeking a meeting with representatives from AGL to determine the impact of changes at Silver Springs and Spring Gully on the region.
“I understand their storage project will continue at Silver Springs but that their core production and exploration will cease and that will have implications for other projects and companies in the region,” he said.
“That may mean a period of uncertainty for some of the drillers waiting to see what happens with those projects but it’s unclear at this stage.
“It may even turn out to be a positive for the region.”
The history of AGL dates back to 1837 when the Australian Gas Light company was created with 'An Act for Lighting with Gas the Town of Sydney".
In 1841 AGL lit the first gas lamp in Australia. Within two years there were 165 gas lamps in the city of Sydney.