qgc injunction deflates linc energy gas plans

COAL seam methane producer Queensland Gas has won a Supreme Court injunction to stop coal-to-liquids hopeful Linc Energy getting access to some Darling Downs ground.

The injunction, won by QGC and its Gladstone LNG partner BG Group, prevents Linc going ahead on part of a deal with Arrow Energy to share overlapping coal ground in the Chinchilla region.

On July 8, Linc announced it had reached agreement on overlapping land in which it held the mineral rights and Arrow Energy held the petroleum rights.

QGC and BGC have an interest in some of that ground and say they did not give consent.

Linc Energy chief executive Peter Bond said the stoush would not slow down the company's billion-dollar coal gasification project aims and that the week-and-a-half long injunction was not released to the exchange because it was not seen as material. The injunction, which lists Arrow, Linc and Queensland's Mines and Energy Minister as respondents, puts the agreement on hold until August 6, when it is next expected to appear in court.

Queensland allows separate petroleum and mining interests over the same ground.

Linc aims to produce 20,000 barrels of synthetic fuel a day from its Chinchilla plant.

The company is in the process of completing an environmental impact assessment, and plans to begin construction of a commercial plant next year. Linc says the underground technology it proposes is vastly cleaner than the previous above-ground coal-to-liquids technologies, with Linc's variety releasing only about 8 per cent more CO2 than regular diesel production.

National Resources Minister Martin Ferguson told The Australian on Friday that coal-to-liquids technology could play an important part in Australia's energy security.

Linc shares rose 6 per cent yesterday to close at $3.45.