sunwater joins queensland gas company in “drought-

ASX Announcement

SunWater joins Queensland Gas Company in “drought-proofing” initiatives for
southern Queensland

A program to use by-product water from coal seam gas production on the Darling Downs
and Maranoa was announced today by the Queensland Gas Company Limited (QGC).
Speaking in Toowoomba, QGC Managing Director Richard Cottee announced several joint
initiatives, with the Queensland’s leading water service providor SunWater, designed to
use bi-product water for farm and town use as early as next year when QGC’s gas
production is scheduled to commence.
“We want to ensure that this water is applied to best advantage and not wasted in our
chronically dry climate,” Mr Cottee said.
“QGC has reached in principle agreement to supply 1000 megalitres a year of town water
to the Chinchilla Shire for 20-30 years. If our funding application under the National Water
Initiative is successful and the normal State Government water transportation support is
available, the supply of “drought-proofing” water to Chinchilla should commence in the
fourth quarter next year.

“QGC also has the potential to contribute to water supply elsewhere in the Darling Downs
either directly or indirectly by supplying some of the irrigation customers, thus enabling
their present water source to be available for supply.
The joint program with SunWater is aimed at determining the appropriate usage of the
water produced as part of QGC’s gas production which is now close to commercial startup.”

QGC expects to begin supplying gas next April from reserves near Chinchilla under the first
of three contracts totalling 15.4 petajoules a year - but with options to increase this to 22.4
PJ pa.
Mr Cottee said that QGC and SunWater had agreed to work together to achieve the best
results for the region. SunWater will prepare a water balance model to determine the
capacity of the water from the QGC operations to supply towns, feedlots and irrigation
applications.

Mr Cottee also advised that agricultural trials will be conducted to assess opportunities to
apply the bi-product water to irrigated crops. Approximately 20 hectares will be planted
with various crops on QGC’s Windibri property. The trials will test the effects of the water
with and without treatment by Reverse Osmosis.
A Reverse Osmosis (RO) pilot plant will be delivered to QGC’s Berwyndale South
development next week. The plant, which will run for 10 weeks, will test the latest water
filtration processes, using the water from the wells being prepared for gas production.
This will help with the design parameters of the full scale plant. QGC has already carried
out successful preliminary RO trials of water from Berwyndale South. The new trials would
ensure that the water quality was appropriate for Chinchilla’s town water supply.

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We have extensively tested the water and previously successfully trialled a reverse
osmosis plant at Berwyndale South. The re-sampling of the water and trials of the RO pilot
will ensure that the town water is scientifically proved to be of high quality.
Discussions will be held with coal mining companies to consider the suitability of the
residual water from the reverse osmosis process in coal washing plants.
Subject to the results of the RO pilot plant tests and to a successful recent application to
the Federal Government for a National Water Initiative Grant, QGC will build a full scale
RO plant that could be commissioned by next April and could be supplying water by next
November.