This is an "OCR" reproduction of the complete article as it appeared in the Courier Mail on 26/7/2008.
Linc and Qld Gas in Legal Stoush. by Tony Grant Taylor
A LEGAL baffle between Queensland’s major inde¬pendent coal seam gas company and the state’s leading underground coal gasification player could delay a $1 billion Darling Downs resource project.
Queensland Gas Company and its British lique¬fied natural gas partner BG Group have won an injunction in the Supreme Court preventing rival Linc Energy from proceed¬ing with a deal with Arrow Energy.
QGC and BG Group have an interest in the area Linc Energy wants for its ambitious plans for a $1 billion coal gas to diesel plant outside Chinchilla on the Darling Downs.
As the market got wind of the baffle yesterday, Linc shares slipped 13.5 percent or 51c to $3.26.
The dispute has high¬lighted a major problem with Queensland’s min¬erals and energy regime, which allows potentially competing exploration interests to exist over the same piece of ground.
Underground coal gasi¬fication operators like Linc hold tenure under the Mineral Resources Act while coal seam gas explorers and producers operate under the Petroleum & Gas (Production and Safety) Act.
Linc recently an¬nounced a deal with CSG group Arrow Energy that saw Arrow consent to Linc going ahead with its Chin¬chilla UCG plans, despite both companies having ex¬ploration permits over the area Linc wants to exploit.
In return, it is under¬stood that Linc provided Arrow with a similar con¬sent giving it priority in developing another explo¬ration area on which Ar¬row plans a major project.
If the consent in relation to Chinchilla was valid, Linc could proceed with its plans.
Linc’s announcement of the deal to the Australian stock exchange noted that “co-holder tenement con¬sents (were) still to be obtained”.
The matter is expected to be back in the Supreme Court on August 6.
LNC Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
