AGL Delays Proposed Coal-Seam Gas Expansion on Community Concern

AGL Energy Ltd., the Australian electricity retailer, said it postponed a plan to expand its Camden coal-seam gas project in New South Wales state, giving the company more time to consider community concerns.

AGL asked the New South Wales Department of Planning & Infrastructure to suspend its evaluation of the Camden expansion and defer a public hearing that was scheduled for Feb. 25, the Sydney-based company said today in a statement. A decision by the Australian government on whether to approve AGL’s Gloucester coal-seam gas development in the nation’s most populous state was deferred yesterday for the seventh time.

AGL is seeking to tap natural gas from coal deposits in New South Wales to help decrease a reliance on energy supplies from outside the state. The company’s projects are among plans that have faced opposition from some environmental groups and farmers worried about possible damage to water supplies.

“AGL understands that there are some members of the community who are concerned about the current proposal, and we believe that this suspension will allow us to consider those community concerns,” Mike Moraza, the company’s general manager of upstream gas, said in the statement.

The existing operations at Camden, which have produced coal-seam gas since 2001, provide about 5 percent of the state’s demand, according to the company. Camden is located about 60 kilometers (37 miles) southwest of Sydney.

The shares fell 1.3 percent to A$15.12 in Sydney trading as of 11:22 a.m. local time, while Australia’s benchmark S&P/ASX 200 Index rose 0.2 percent.

The Australian government pushed back a decision on Gloucester by two weeks to Feb. 21, the Environment Department said yesterday in an e-mailed response to questions. That project, about 250 kilometers north of Sydney, would include as many as 110 wells in its first stage and meet the demands of more than 1 million homes, AGL’s website shows.

Only 5 percent of New South Wales demand is met from gas produced within the state, AGL said. More gas is required to maintain reliable and affordable supply, with New South Wales expected to face a gas shortage by 2017, the company said.

To contact the reporter on this story: James Paton in Sydney at jpaton4@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

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