AGL Energy shares climbed after the Federal Government was forced to admit it would approve the first stage of a new coal seam gas (CSG) project in NSW.
Federal Environment Minister Tony Burke on Monday granted conditional approval for a 110-well coal seam methane gas project at Gloucester on the state’s mid north coast.
He was forced to act after a leaked letter showed he intended to approve the controversial project along with Whitehaven Coal’s Boggabri and Maules Creek mines.
He has accused the NSW government of leaking the sensitive information and causing market uncertainty and has ruled them out of any future dealings over the mine proposals.
The approval remains subject to 36 conditions protecting natural fauna and flora, and local groundwater supplies.
Mr Burke said there was no guarantee the three projects would go ahead, insisting they were “highly conditional”.
He says the CSG project will only go ahead if AGL met conditions in relation to potential adverse effects on groundwater quality.
Federal Lyne independent MP Rob Oakeshott said he was deeply disappointed about the decision in a “busted planning process” despite community concern about threats to drinking water.
AGL group general manager of upstream gas Mike Moraza said the company would now work on satisfying environmental conditions and securing planning approval from the NSW government.
“Coal seam gas is one of the most stringently regulated industries in Australia,” he said in a statement.
“AGL will continue to use the best available science and technology to explore for and extract natural gas safely and without harm to the surrounding environment.”
AGL shares closed up 20 cents, or 1.31 per cent, at $15.45.
Stage one of the Gloucester project will include up to 110 gas wells and associated infrastructure, AGL said.
Construction and operation of the project would create significant local employment opportunities, it said.
AGL suspended a proposed $100 million 66-well Camden CSG project on Sydney’s south-western fringe last week.
