Australia's AGL to Review Upstream Gas Business Amid Gloucester Chemical Leak

Australia listed AGL Energy Limited (AGL) will undertake a comprehensive review of its upstream gas business, Managing Director & CEO, Andy Vesey announced Wednesday.

The review will encompass the management structure and the operational and management practices required to position the business to deliver on its goals of safely exploring for and producing gas resources for AGL’s customers.

As a result, Group General Manager, Mike Moraza, who looked after the coal seam gas business, has decided to retire immediately, AGL said Wednesday.

This latest move by the company comes as last month AGL suspended pilot production testing at its Waukivory coal seam gas pilot project. The decision was made in response to the detection of Benzene, toluene, ethylbenzene and xylene (BTEX) in samples of flowback water taken from two of the four wells and from an aboveground water storage tank. As a result, AGL was restrained to commence operations at its Gloucester coal seam gas site until New South Wales Environment Protection Authority (EPA) is satisfied that the operations can be conducted in a manner that does not pose a risk to the environment.

In announcing the change, Vesey said that, as AGL prepares for a new phase in the development of its gas projects, it was important to adapt the structure and governance frameworks.

“The gas business has the potential to provide vital gas resources for our NSW customers and is set to contribute significantly to our balance sheet and deliver solid returns for our shareholders. It is important that we get the structure right,” said Vesey.