By Martin Klapper, Partner and Josh Doig, Law Clerk (Overseas Qualified)
The Mines Legislation (Streamlining) Amendment Bill 2012, expected to receive assent and become law in the next two weeks, introduces a number of legislative amendments relevant to Queensland's coal seam gas (CSG) and liquid natural gas (LNG) industries. It also makes changes to work health and safety laws relating to pipelines.
Here, Martin Klapper and Josh Doig explain the key changes of which CSG and LNG proponents need to be aware.
Key changes affecting the CSG/LNG industries
- Petroleum lease holders will be able to transport water that is produced as a result of CSG exploration and production operations, and construct treatment facilities for this water.
- Petroleum lease holders will be able to seek approval for changed production commencement dates, subject to certain conditions.
- Additional provision will be made to allow for the registration of pipeline easements.
- Petroleum lease and authority to prospect holders will be able to undertake incidental activities that are reasonably necessary for petroleum leases or authorities to prospect, including constructing roads, powerlines and fibre optic cables, on land other than that covered by the petroleum lease or authority to prospect held by the holder.
- Petroleum lease holders will be required to submit an annual infrastructure report.
- The Work Health and Safety Act 2011 will apply to pipelines constructed to transport water extracted in connection with CSG exploration and production operations.
Management of CSG water
The Bill amends the Petroleum and Gas (Production and Safety) Act 2004 (PG Act) to facilitate the efficient transportation and treatment of CSG water and brine.
The amendments allow petroleum lease holders to construct pipelines under a pipeline licence to transport 'produced water' between petroleum permits and to other locations. 'Produced water' is water that is extracted in connection with exploring for and producing CSG, and water taken or interfered with during the course of undertaking authorised activities.
A petroleum lease holder will also be able to construct and operate facilities for the treatment, storage or processing of produced water on land covered by a petroleum lease. These facilities will only be authorised if they are constructed on land which the petroleum lease holder owns within the relevant petroleum lease.
This change will enable a petroleum lease holder to transport CSG water from various petroleum leases to a centralised treatment facility, reducing the number of treatment facilities that a petroleum lease holder may require and minimising construction footprints and costs.
Ability to change date of commencement of production
The Bill amends the PG Act to permit petroleum lease holders to apply to change the production commencement date under a petroleum lease, providing lease holders with flexibility for production planning.
A petroleum lease holder may apply to change the commencement date provided that:
- the holder has a relevant arrangement to supply petroleum for the relevant petroleum lease;
- production is to commence more than two years after the petroleum lease takes effect; and
- the application is made at least one year before the day by which production is to start under the relevant petroleum lease.
The Bill amends the PG Act to allow a pipeline licence holder to register an easement for the pipeline under the Land Act 1994 or Land Title Act 1994, even where there is no land that is benefited by the easement. This amendment was necessary because easements are generally required to benefit land in order to be valid and registrable, meaning pipeline proponents have experienced difficulties where there is no specific land benefited. The proponents of pipelines such as the pipelines to the LNG facilities at Gladstone will be treated similarly to a public utility for the purposes of being able to register easements, even where no land is benefited.
The Bill expands what constitutes incidental activities that an authority to prospect holder or petroleum lease holder is entitled to undertake to include incidental activities that are reasonably necessary, not only for the relevant authority to prospect or petroleum lease, but also for another authority to prospect or petroleum lease.
Incidental activities include constructing communication systems, power lines and roads. This change effectively permits an authority to prospect or petroleum lease holder to undertake incidental activities such as constructing power lines across an authority to prospect or petroleum lease for use on an adjacent authority to prospect or petroleum lease.
Annual infrastructure reporting obligations
Petroleum lease holders will be required to submit an infrastructure report annually on or before 1 September. The infrastructure report must include details of the authorised activities conducted, and infrastructure and works constructed, within the area of the relevant petroleum lease for the previous financial year.
Health and safety
The Bill maintains the existing jurisdictional arrangements for health and safety on resource tenure sites by amending the Work Health and Safety Act to confirm that it will not apply to mines in relation to hazardous chemicals and major hazard facilities.
It also confirms that the Work Health and Safety Act will not apply to petroleum operations conducted under the PG Act, except for construction activities and the operation of pipelines for transporting produced water.
The exclusion of pipelines for transporting produced water appears to be inconsistent with one of the purposes of the Bill: to streamline the approvals process for resource tenements. The changes will mean that two separate safety regimes, the PG Act and Work Health and Safety Act, will apply to essentially the same geographical locations.
For details on the changes to compulsory acquisition implemented by the Mines Legislation (Streamlining) Amendment Bill 2012, please read our previous Alert.
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