Metgasco pulls up stumps
METGASCO'S decision to suspend its operations on the Northern Rivers will see 15 Casino-based employees losing their jobs, with a skeleton staff of just two remaining by the end of the year.
Metgasco chief executive officer Peter Henderson announced the indefinite suspension yesterday citing an uncertain regulatory environment as the key cause.
The company has been granted permission to keep its entire exploration licence by the NSW Resources Department and hopes to recommence exploration when the regulatory environment is more stable.
"We believe over the next two or three years there will be gas shortages in the eastern coast of Australia which will inevitably result in much higher gas prices," Mr Henderson said.
"As soon as we have a stable and secure regulatory environment we will start our operations again."
"The gas is still in the ground and over time its value will increase."
Mr Henderson said the primary reason for the immediate suspension was the NSW Government's residential 2km CSG-free buffer zone announced three weeks ago, which remained unclear in its definition of a residential area.
He also blamed the previous 18-month statewide moratorium on the industry and what he said were increasingly lengthy delays in approvals for continued exploration.
"We don't think we'll have sensible stable policy in place until the end of the year after the Federal election, and to go through spending shareholders' funds on that basis would be just wasteful," Mr Henderson said.
Mr Henderson said the decision would cost the Richmond Valley local government area hundreds of millions of dollars and potentially "more than $1 billion" in investment.
He said rural communities in Queensland had been "reinvigorated" by CSG development and the industry, which produced 30% of the gas currently consumed by the eastern states.
He disagreed that the decision had been influenced by community opposition.
The company has spent $100 million in acquiring licences and exploration in the past decade and in 2009 announced it had struck the most significant conventional gas find in NSW history, according to then managing director David Johnson.
Plans for a $42 million gas-fired power station and pipeline to Queensland were subsequently developed, amid growing community opposition to the industry.