What is coal seam gas?
Coal Seam Gas (CSG) is natural gas found in coal deposits. The coal and gas are formed from plant matter under pressure over many millions of years. Coal seam gas is used in the same way as any other form of natural gas for cooking and heating as well as in industrial processes and electricity generation.
CSG collects in underground coal seams by bonding to the surface of coal particles. The coal seams are generally filled with water and it is the pressure of the water that keeps the gas as a thin film on the surface of the coal (the technical term for this is 'adsorption').The coal seams generally contain more brackish (salty) groundwater than aquifers that are usually used for agriculture.
The level of gas that can be produced from a coal bed depends on the thickness of the coal, gas content, permeability and the depth of the coal seam. In high quality CSG deposits the cleats or fractures in the coal bed are permeable enough to allow gas and water to flow freely through them.
Coal seams that can produce CSG economically are usually 200 to 1,000 metres below the surface.
In Australia, CSG is plentiful.
Coal Seam Gas is natural gas.
CSG provides 90% of Queensland's gas needs and 15% of the state's electricity generation
CSG has been known about ever since the coal mining industry began in Australia in the early 1900's.
With advances in technology, it has developed into a key transition fuel, helping to lower our carbon emissions as we move to a low carbon future. CSG now makes up a significant proportion of Australia’s natural gas supply, with the Australia Pacific LNG Project providing the largest CSG resources in Australia.
Exploration for CSG in Queensland began in 1976 in the Bowen Basin, but the CSG industry did not really start to grow until the early 1990’s. Commercial production began in Queensland in 1996 so this is a well developed industry for Australia.
Australia Pacific LNG’s joint venture partner, Origin, has been working in regional Queensland for over 30 years and in the field of CSG for more than 15 years.
Australia Pacific LNG already supplies CSG to power stations to produce electricity. It also supplies CSG to major industrial customers, homes and businesses throughout Queensland.
Coal seam gas is now about to form the basis of a major new liquefied natural gas (LNG) export industry that will deliver substantial economic benefits to Queenslanders and create many thousands of jobs in the state.
The journey of CSG to LNG – an industry perspective: Part 1
The journey of CSG to LNG – an industry perspective: Part 2
Difference to Shale Gas
Some of the information being presented about the US gas industry through movies, websites and social media concerns shale gas, not coal seam gas. While both are classified as ‘unconventional’ gas resources, the geology is very different and the extraction processes also differ.
Shale gas wells are generally a lot deeper, with all the wells requiring hydraulic fracturing which is often more extensive than the process required for CSG. Australia Pacific LNG’s CSG production in Queensland is currently mainly from wells that do not require fracture stimulation and we expect to only fracture around 30 to 40% of wells in the Australia Pacific LNG project.
Coal seam gas is mostly methane and has far more simplified drilling, production, storage and treatment processes than shale gas, which generally results in the production of some higher order complex hydrocarbons, including light oils.
Gas has been used in Australia since the 1820s. It is used for cooking, heating and providing hot water. It’s also a major fuel source used to generate electricity for homes and industry, here and overseas.
Natural gas is methane
Natural gas is mainly methane – a colourless and odourless gas. It is typically 90% to 98% methane (CH4) with small amounts of other hydrocarbons, nitrogen and carbon dioxide (CO2). Our CSG is almost pure methane, typically over 97% CH4.
Natural gas, including coal seam gas, is often referred to as a low carbon energy source as it produces around half the greenhouse gas emissions of coal when used as a fuel for electricity generation. Gas fuelled electricity generation also requires much less water than is required to run a coal fired power plant. A report from WorleyParsons found that 4.3 tonnes of carbon emissions are avoided globally when natural gas is substituted for a tonne of coal in electricity generation in customer countries such as China.
Australia's major coal seam gas resources are found onshore in eastern Australia. Currently the largest known proven reserves are in Queensland's Bowen and Surat Basins. This map indicates the location of Australia Pacific LNG’s permits in these basins.
CSG has been produced from these areas since the mid 1990’s. Until recently, the bulk of supply has been derived from the Bowen Basin. However, production from the Surat Basin’s Walloon Coal Measures is now growing rapidly – Australia Pacific LNG’s Talinga gas field draws CSG from these coal measures.
CSG is found deep under the ground, typically 200 to 1,000 metres below the surface. To extract the gas, wells about the diameter of a dinner plate are drilled down, through the geographic layers into the coal seams. After the hole is drilled to the required depth, steel casing is installed and cement is pumped to fill the space between the casing and the well bore. When the cement hardens it provides a barrier between the extraction process and outlying areas.
Typical Section of the Walloon Coal Measures
All casing and tubing used in Australia Pacific LNG's operations are manufactured to American Petroleum Institute (API) 5CT requirements. This sets minimum standards for manufacture and testing. It also sets minimum performance properties, allowing each well to be designed and operated safely for its entire producing life.
Australia Pacific LNG use hybrid drill rigs in development drilling activities (pictured below). They are safer, more compact and drill faster with minimal disturbance, meaning there is less impact to the environment and surrounding communities. We are the only operator in Australia using these drilling rigs.
The wells enable some of the water contained within the seams to be pumped to the surface. This pumping reduces the groundwater pressure, allowing the gas to flow up the wells.
The gas and water that comes out of the wells are separated at the surface. The gas is piped to a processing facility for distribution via pipelines to residential and industrial customers including power stations, and to the LNG facility at Gladstone. The produced water which is brackish is piped to treatment facilities.
Fraccing helps the gas to flow
In some locations, there are few natural pathways for water and gas to flow within the coals (i.e. the coals are not highly “permeable”). In this situation a fluid, made of predominantly water and sand with a small number of chemical additives, is pumped down the well bore and into an isolated section of the coal under pressure to create additional pathways (fractures) to help release and extract the gas. The sand holds the fracture open. This process is known as fracture stimulation or fraccing. This is a controlled and closely monitored activity, and the fraccing fluids used by Australia Pacific LNG are readily degradable and are not considered harmful in the concentrations applied. We only use experienced operators to conduct fracturing operations and all equipment is tested and certified prior to commencement of the activity in order to minimise impacts to the environment. Australia Pacific LNG will fracture 30% to 40% of our wells over the life of the Project. Fracturing takes place in the coal seams only, which typically lie hundreds of meters below any commonly used aquifers.
Many countries that do not have large natural gas reserves like those found in Australia are also keen to use gas, particularly to generate electricity. To liquefy natural gas it must be cooled to -161oC. In liquid form natural gas is 1/600th of its original size. The technology to do this was first developed in the early 20th century and allows for the export of natural gas over large distances. Today’s LNG industry uses specially designed shipping vessels to transport the liquefied natural gas to overseas markets.
Liquified Natural Gas tanker
It is then re-heated at its destination, returning it to its gas state and used, just as normal, for heating, cooking and electricity generation. LNG is an enormous growth industry, with many countries seeking lower carbon fuels and to diversify their sources of energy.
Australia is a major exporter of LNG
One of the first LNG export facilities in the world was built by project partner ConocoPhillips in Alaska and began exporting to Japan in 1969. Japan is still the biggest importer of LNG but emerging markets in China and other parts of Asia are growing rapidly. Australia is a major beneficiary of this growing industry and is forecast to soon rival Qatar as the biggest exporter of LNG, bringing increased jobs and economic growth to Queensland.