Agl Energy Limited · ASX:AGL
Agl Energy — Corporate Update (May 2013)
38 slides from Agl Energy's corporate update, May 21, 2013
Slide 1: ASX Release: Camden Gas Project – Open Day presentation
AGL Energy Limited Level 22, 101 Miller Street Locked Bag 1837 T: +61 2 9921 2999 ABN: 74 115 061 375 North Sydney, NSW 2060 St Leonards NSW 2065 F: +61 2 9921 2552 AUSTRALIA AUSTRALIA www.agl.com.au ASX Release Camden Gas Project – Open Day presentation 21 May 2013 Attached is a presentation to be
Slide 2: Camden Open Day
Camden Open Day Mike Roy, Head of Operations John Ross, Hydrogeology Manager Julie Delvecchio, Head of Community Relations 21 May 2013
Slide 3: Disclaimer and important information
2 Disclaimer and important information The information in this presentation: › Is not an offer or recommendation to purchase or subscribe for securities in AGL Energy Limited or to retain any securities currently held. › Does not take into account the potential and current individual investment obje
Slide 4: Agenda
3 › Introductions › Wholesale gas markets & NSW › Overview of AGL Upstream Gas › AGL in the Macarthur region › What is coal seam gas? › Camden Gas Project › Water management › Community relations › Questions
Slide 5: Wholesale gas markets and NSW
4 Wholesale gas markets and NSW
Slide 6: Wholesale gas supply
Wholesale gas supply 5 Gas retailers collectively face drop off in contracted supply. › Gladstone LNG exports increase to ~1,500 PJ/a Eastern Australia gas demand 3,000 » Coincides with roll off of east coast domestic 2,500 supply contracts 2,000 › LNG projects seeking additional gas between 1,500 2
Slide 7: NSW gas policy reversal
NSW gas policy reversal 6 Significant NSW gas reserves at risk. › NSW imports 95% of its gas from NSW CSG 2P reserves (PJ) interstate: from South Australia, Queensland and Victoria › LNG demands now compete for continued supply from those States. › NSW CSG has the potential to supply gas to the stat
Slide 8: NSW gas policy reversal
NSW gas policy reversal 7 Likely asset impairment and future gas supply impacts. › Book value of Camden (including the northern expansion) and Hunter gas projects of $325 million may be substantially impaired once rule changes finalised › Development of Gloucester Stage 1 not impacted by proposed po
Slide 9: NSW gas consumption
NSW gas consumption 8 Manufacturing sector at risk of gas price surge. › NSW businesses face potential NSW gas consumption by sector (%) significant increases in the cost of delivered gas » Assuming ability to secure gas supplies › Industries most at risk are food processing, brick, cement, chemical
Slide 10: NSW CSG is highly regulated industry
9 NSW CSG is highly regulated industry Already subject to the strictest controls in Australia. › Operations must comply with: » NSW Environmental Planning and Assessment (EP&A) Act 1979 » NSW Petroleum (Onshore) Act 1991 » Commonwealth Environment Protection and Biodiversity Conservation (EPBC) Act
Slide 11: AGL Upstream Gas
AGL Upstream Gas SIAGL
Slide 12: AGL Upstream Gas assets
11 AGL Upstream Gas assets Majority of assets in exploration phase. › Operating assets: AGL’s Upstream Gas assets » Production: Camden Gas Project, Silver Springs Production, Spring Gully Project » Moving to Development: Gloucester Gas Project » Exploration: Hunter Gas Project, Galilee Gas Project,
Slide 13: AGL in the Macarthur region
12 AGL in the Macarthur region
Slide 14: Camden Gas Project
13 Camden Gas Project Safely operating for 12 years. Camden Gas Project’s gas fields › Camden fields: » Commenced 2001 » 60 km southwest of Sydney » Produces approximately 5% of NSW’s gas supply (equates to 265,000 homes) » 100km of low pressure gas gathering lines › Currently 144 wells: » 117 have
Slide 15: Coal seam gas (CSG)
14 Coal seam gas (CSG): › What is it? › How is it extracted?
Slide 16: What is CSG?
15 What is CSG? Naturally occurring gas trapped in coal seams. Typical coal cleats › Mainly methane (CH4) › Produced from ancient organic matter & trapped in coal seams › Held in place by water that saturates coal seam Butt › Gas moves through coal via natural fractures Cleats › About a third of eas
Slide 17: Well integrity and design
16 Well integrity and design Protects groundwater. Cross section of a CSG well › AGL follows Oil & Gas Standards using API¹ casing & wellheads Cement Centraliser › 4 barriers of protection down to 120m below the surface Surface casing › Wells are pressure cemented to protect aquifers Cement › Cement
Slide 18: Well perforations
17 Well perforations Establish the only connection between casing & targeted coal seam. Cross section of perforated concrete › Small holes precisely punched into the steel casing and concrete › Only at coal seam depth › Allows gas to flow back through well to the surface Perforated steel casing » Ca
Slide 19: Horizontal well design
18 Horizontal well design Reduces operational footprint. › A technique that stimulates gas flow › Can drill in seam for up to 2,000m Horizontal well › Drilling and completion takes 3-4 weeks › 31 horizontal wells drilled in Camden to date › Allows as many as 6 wells per pad › Increases spacing betwe
Slide 20: Fracturing CSG wells stimulates flow
19 Fracturing CSG wells stimulates flow › Process: CSG fracturing in Gloucester » Fluid pumped into a formation pushes open natural cleats » Sand is pumped in to hold the ‘fracture’ open » End result: a highly conductive path for CSG to flow into the well & to surface » Operation takes about 2 days
Slide 21: Minimal footprint after initial drilling
20 Minimal footprint after initial drilling CSG coexists with other land uses. › Producing well enclosure is 6 x 6m plus A CSG well in the Macarthur region access track › Work with landowners on location of well head › Typical well pad spacing » Vertical wells 600m apart » Horizontal wells 2km apart
Slide 22: Camden supplies ~5% of NSW demand
21 Camden supplies ~5% of NSW demand Central processing prepares gas for supply network. › The gas plant: » Compresses Rosalind Park Gas Plant » Dehydrates » Odorises › Site selection minimises visual and noise impacts on local community › Minimal flaring of gas » Camden Open Day » 21 May 2013 » AGL
Slide 23: Water management
Water management 75) SUPPORTING THE COMMUNITY
Slide 24: Water resources in Macarthur area
23 Water resources in Macarthur area Extensive understanding protects water resources. Sydney’s water catchments › Regional groundwater studies (by others) confirm the conceptual model › Project groundwater studies › Managing CSG produced water sustainably Approximate location of Camden Gas › Extens
Slide 25: CSG water in the southern coalfield
24 CSG water in the southern coalfield Camden gas well › Different geology from QLD coal basins » Older and deeper (~700+ m) » Fewer permeable coal seams = far less water » Last year, 89 wells produced <4.8 ML = 1 week, 1 well in QLD » All water from coal seams, none from Hawkesbury Sandstone aquife
Slide 26: Hawkesbury Sandstone
25 Hawkesbury Sandstone The beneficial aquifer in Camden. Hawkesbury Sandstone off F3 » Camden Open Day » 21 May 2013 » AGL External
Slide 27: Water from the Hawkesbury Sandstone aquifer
26 Water from the Hawkesbury Sandstone aquifer Water is of quantity and saline. Indicative water yields Groundwater salinity Approximate location of CGP » Camden Open Day » 21 May 2013 » AGL External
Slide 28: Conceptual groundwater model
27 Conceptual groundwater model Impermeable rocks separate aquifers from coal. Alluvium: Minor aquifer. Very thin <20 m thick. Good yield, good permeability, variable quality: . fresh to brackish. Limited extent. Only occurs proximate to the Nepean River Wianamatta Shale: Shallow Aquitard/Minor aqui
Slide 29: Produced water management
28 Produced water management Reuse solutions to promote sustainable operations. What happens to produced water? › Water extracted from coal seams is then: » Temporarily stored in onsite tanks above the ground » Transported by truck to RPGP » Filtered to remove coal fines » Collected and taken to an
Slide 30: Groundwater monitoring network
29 Groundwater monitoring network Will operate as long as the project does. A water monitoring bore › Dedicated monitoring bores: » Beneficial aquifers » Water level and quality monitoring › Water supply bores: » Water quality monitoring › CSG wells: » Water quality monitoring at wells and at RPGP p
Slide 31: Results of monitoring bore tests
30 Results of monitoring bore tests Water quality has not changed. › No degradation of water quality has Chemical signatures of water been observed at water supply bores CSG produced water › Distinct chemical signatures of Hawkesbury Hawkesbury Sandstone Aquifer and produced water from coal seams ›
Slide 32: Community Relations
Community Relations 75: SUPPORTING THE COMMUNITY
Slide 33: How did we get here?
32 How did we get here? Outrage has been fueled by misinformation and lack of information. › Gaslands and other U.S.-based films have raised awareness of unconventional gas › Media spotlight › Groups using internet to network and Anti-CSG protestors rally opposition › Industry hasn’t filled the info
Slide 34: Community strategy
33 Community strategy Community acceptance critical to operational success. › Major investment in: » Team » Research » Grassroots activity Hunter Project Showcase, March 2013 › Fill information void » Use digital channels » Site tours » Staff in project areas available › Leverage community input » I
Slide 35: Outreach efforts improving
34 Outreach efforts improving Significant increase in engagement and transparency. › 205 engagement activities between May 2012 and May2013 » 30 separate open days, site inspections and tours of our operations » Hunter showcase Gloucester Town Hall, 16 May 2013 > 330 people attended including MPs,
Slide 36: Camden Gas Project
Camden Gas Project 35 Providing benefits to the Macarthur community. › Approximately 60 employees & contractors: » 80% are from the Macarthur region AGL employees educating kids on energy » active volunteers in local organisations › 40% of suppliers are local to the Macarthur region › Spent more tha
Slide 37: Thank you
Thank you _ NAGL Q&A
Slide 38: Contact information
37 Contact information Sales - Electricity and gas agl.com.au Customer Service 131 245 AGL Energy Online/My AGL IQTM aglenergyonline.agl.com.au Corporate Information agl.com.au/about/Pages/Default.aspx Investors John Hobson Head of Capital Markets phone: +61 2 9921 2789 mobile: +61 (0) 488 002 460 e