Steve’s presentation included a summary of the eastern Australian gas market and reserves position, and highlighted some of the drivers behind the development of the QSN Link by Epic. He reinforced the growing importance of Queensland’s growing coal seam gas reserves as a source of fuel for new gas-fired generation loads in eastern Australia. The QSN Link will, for the first time, allow Queensland’s coal seam gas to be directly delivered to southern markets, providing an alternative source of gas to replace declining Cooper Basin gas fields.

The first stage of the project involves construction of a 400 mm diameter pipeline between Epic’s South West Queensland pipeline (SWQP) and the Moomba to Adelaide pipeline, including a connection to the Moomba to Sydney pipeline. In addition, Epic will construct a mid-line compressor station on the SWQP and compression is being installed at Wallumbilla. The entire first stage will be debt funded under a $165 million extension of Epic debt facility.

Interest in the QSN Link has been strong, and Steve reported that Epic has already contracted the second stage expanded capacity of the QSN Link, which is due to be commissioned by no later than January 2013. Steve indicated that there were still further expansion options available to transport additional quantities of coal seam gas to southern markets.

The stage 1 project is progressing well and is due to be completed by mid-January 2009.