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1 Under a 50-year project agreement that commenced in 2000, AGL has no effective exploration rights (or ongoing cost obligations) within exploration tenement ATP 1103 (previously designated ATP 364P) as these were assigned to Arrow Energy Limited. However, AGL is entitled to participate up to a 50% interest in any commercial development by contributing its share of past costs. Past costs are anticipated to be less than $0.05/GJ. 

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## Yesterday, today, tomorrow... 

From lighting the first gas street light in Sydney in 1841 to pioneering the nylon pipe technology in the 1980s, AGL has continued to transform the Australian energy industry in Australia. Today, AGL has a portfolio of gas investments to supply our customers. We are securing a sustainable future of reliable gas supply with gas storage facilities and coal seam gas projects. 

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## Newcastle Gas Storage facility receives Government approval 

The New South Wales Planning Assessment Commission and the Commonwealth’s Department of Sustainability, Environment, Water, Population and Communities have approved AGL’s application to construct the Newcastle Gas Storage Facility project at Tomago, near Newcastle. 

Expected to be completed in 2015, the facility will include: 

> a processing plant that will convert pipeline natural gas to liquefied natural gas (LNG) by cooling it to –162°C. It will be capable of processing up to 66,500 t of LNG per year; 

> an insulated, non-pressurised LNG storage tank capable of containing 30,000 t or 63,000 m³ of LNG, equivalent to 1.5 petajoules (PJ) of natural gas, and an associated containment area; and 

> a re-gasification unit to convert the LNG in the storage tank back into natural gas. 

The facility will allow AGL to provide security of gas supply for more than 700,000 customers by managing peak gas demand and pipeline constraints. 

## Coexistence 

During the year, AGL continued to undertake activities to demonstrate that coal seam gas exploration and production processes can co-exist with the agricultural, viticultural and tourism industries already operating in areas such as the Hunter Valley in New South Wales. In addition to owning gas exploration permits, AGL also owns the freehold interests in approximately 4,203 acres of land in the Hunter Valley, including nearly 100 acres of vineyards on which a number of gas exploration wells and water monitoring bores have been drilled. Using the grapes from our owned vineyards, AGL has worked with local winemakers to produce award winning wines. 

AGL has also appointed a station manager to look after its properties in the Hunter Valley. The station manager’s responsibilities will include the development of some of the land as operating cattle farms. 

During the year, the New South Wales government released a number of draft policy proposals regarding strategic use of land and interference of aquifers. It also released a draft code of practice for coal seam gas exploration activities. AGL welcomes the Government’s efforts to put in place policies and codes of practice to protect the State’s valuable land and water resources while recognising the importance of developing gas reserves to preserve the security of energy supply over the long term. 

