Australia Pacific LNG Wells Clear Probe

Australia Pacific LNG confirmed Friday that a comprehensive investigation into traces of BTEX (benzene, toluene, ethylbenzene and xylenes) found in produced water from its coal seam gas exploration activities in October has been completed. Findings from the investigation confirm that there is no significant risk to the environment or human health associated with these activities.

Australia Pacific LNG has kept the Queensland Government fully informed of the investigation, providing detailed information to the Queensland regulator, the Department of Environment and Resource Management (DERM).

DERM has confirmed the company's proposed monitoring and reporting guidelines to manage Hydraulic Fracture Stimulation (HFS) programs are appropriate.

The investigation identified possible sources of BTEX contaminants, including small amounts of lubricants and diesel which may have been introduced inadvertently in the course of operations. Processed mineral oil present in an additive previously used in HFS fluids was also identified as containing trace levels of TEX chemicals (well below Australian Drinking Water Guidelines).

These potential sources are being addressed with strengthened control measures put in place for future HFS operations in collaboration with HFS service providers.

Steps have been and will continue to be taken to ensure that all HFS fluids meet laws passed by Queensland Parliament on 23 November 2010.

The investigation has also indicated that trace levels of BTEX may be naturally occurring under certain conditions and operations will be conducted in a manner that manages environmental risk and protects water sources both at the surface and below the ground. Australia Pacific LNG already has strict controls in place to ensure that water produced from wells is contained in lined and fenced ponds and tanks ahead of treatment as part of its current operational practice. This ensures that produced water is isolated from water courses and livestock during its treatment.

Following the investigation and the implementation of additional controls and assurance processes, Australia Pacific LNG will recommence HFS operations.

Australia Pacific LNG will continue regular testing of water from its operations and reporting of results to DERM and is committed to meeting its monitoring and reporting obligations to DERM.

Australia Pacific LNG Pty Limited is a 50:50 incorporated joint venture between Origin Energy Limited and ConocoPhillips which combines Origin's 13 and ConocoPhillips' 25 years of CSG experience, as well as ConocoPhillips' 40 years experience in operating and developing LNG facilities. Australia Pacific LNG is already producing almost 40 percent of Australia's total CSG production to meet domestic market requirements. Australia Pacific LNG holds the largest CSG reserves in Australia. Australia Pacific LNG's project stretches from the Surat and Bowen Basins along a 450km pipeline to a site at Laird Point on Curtis Island off Gladstone. Origin is Australia's largest integrated energy company and ConocoPhillips is a leader in the development of LNG projects internationally including the existing plant in Darwin, Australia.