AGL warns of fallout from CSG restrictions
One of the country's biggest gas suppliers has implied that it will heavily write off its exploration acreage in NSW, as a result of the state government's decision to restrict coal seam gas searches.
Earlier this month, the government decided to limit CSG exploration by preventing work done near residential areas.
AGL has $325 million worth of investment around the state for the purposes of CSG exploration - with many of the sites found in areas that are no longer viable under the O'Farrell government decision.
But the irony is that as a result of these restrictions, the sites that are viable could be worth more.
One of the sites of exploration for the company is in Gloucester, and AGL chief executive Michael Fraser said that this is now a valuable source, the Sydney Morning Herald reports.
"We are spending millions on arbitration, with producers trying to push up the price of gas," he said.
"If you cut off supply - that has only one consequence. The Gloucester project is now worth a lot more money because of the high prices NSW now faces."
AGL responded to the government's decision last week by warning that pressure will be placed on electricity and gas sources, resulting in rising prices.