Coal seam gas (CSG) is a type of natural gas found trapped within underground coal seams. CSG makes up over 87% of eastern Australia's gas reserves and is an important source of energy, supplying over 1 million homes and powering over 90% of Queensland's gas supply. CSG is extracted through drilling wells into coal seams hundreds of meters below ground, and removing the water that traps the gas, allowing the methane to be captured and distributed through pipelines. The CSG industry provides economic benefits through job creation and supporting regional communities, while gas is a lower emissions fuel than coal when used for electricity generation. Strict regulation aims to ensure CSG extraction is conducted safely and sustainably.

1. Find out more about...
Coal Seam Gas (CSG)
+ Gas-fired power plants emit nearly half the emissions
of coal-fired plants and use a fraction of the water.
Did you know?
CSG is used by over 1,000,000
homes and businesses
in New South Wales.
Queensland relies
on CSG for over 90%
of its gas supply.
CSG makes up
over 87% of eastern
Australia’s gas reserves.2
CSG has been with us since
Australia’s coal mining industry
began over 100 years ago.
CSG is natural gas, generally
95-97% pure methane.1
CSG has been
commercially produced in
Queensland for nearly 20 years.
1995

2. What is
coal seam gas?
Coal seam gas (CSG) is natural gas
mainly composed of methane, the
odourless and colourless gas used
in homes and businesses.
CSG collects in underground coal
seams formed over tens of millions
of years from compressed organic
material. The naturally occurring
coal seam gas bonds to the surface
of coal particles.
A combination of water and ground
pressure traps the gas in fractures of
underground coal seams, typically 500
– 1,200 metres below the surface.
Where is CSG found?
Australia’s major coal resources are in a number of basins – the Bowen and
Surat in Queensland, the Gunnedah, Gloucester and Sydney in New South Wales
and the Clarence-Moreton Basin on the border between those two States.
To build a picture of the coal resource in a particular location, we use special
trucks that bounce seismic waves underground to determine the depth and
thickness of coal seams.
If we think there is likely to be a commercial quantity of CSG, we drill test wells.
• Over 87% of eastern Australia’s reserves are held in coal seams
• Less than 10 years of conventional gas supply remains
Source: EnergyQuest February 2014 Quarterly, as at December 2013
Geology of natural gas
500
0
-500
-1000
-1500
-2000
-2500
-3000
-3500
-4000
6
5
4
2
3
1 Wind Turbine: 65m
Onshore Oil and Gas Drilling Rig: 43m
Gas Wellhead: 1.5m
Typical Coal Seam Gas Well:
500m-1200m
Typical Oil or Sandstone
Gas Well: 1200m-3000m
Typical Shale Gas:
2500m-4000m
Benefits of CSG
Natural Gas from coal seams is used in
exactly the same way as other natural
gas, for cooking, heating, electricity
production and to make products such
as fertilisers.
With over 30 per cent of eastern
Australia’s gas currently coming from
coal seams, it’s likely you are already
using CSG.3
CSG’s benefits go beyond its use as
a fuel. The CSG industry has created
jobs and local business opportunities
in regional Australia, helping revitalise
communities and reversing the
migration of youth to urban areas. For
instance, in Roma Queensland, where
the CSG industry has been active for
nearly 20 years, the local economy
grew 120% from 2006 to 2011.4
~88,000
PJ
~1,000
PJ
~50,000
PJ
Australia’s reserves East Coast reserves
Conventional
CSG
~6,500 PJ
~43,500 PJ

3. See next page
for industry
references to
more information
Santos and
coal seam gas
Santos is one of the CSG
industry’s most experienced
operators. The company’s
Scotia-3 well in Queensland,
drilled in 1996, was the first
well drilled to test the late
Permian CSG play. Santos’
Scotia CSG plant commenced
production in 2002.
Today Santos’ acreage in
Australia covers approximately
200,000km. Santos’ extensive
CSG resources in the Surat/
Bowen Basins near Fairview
and Injune in Queensland will
supply the GLNG project, one
of three new Australian CSG-
to-LNG plants exporting to
Asian markets. The company
also has strong CSG prospects
in the Gunnedah Basin in
New South Wales.
Santos recognises that
its success depends
on maintaining healthy
relationships with local
landholders.
Santos GLNG has 850
agreements with landholders
and a recent survey has
shown that 9 out of 10
landholders would welcome
us back on their land.
How do you produce CSG?
CSG was first produced in Australia during the early days of coal mining. It was
extracted at the Sydney Harbour Colliery in Balmain from the early 1900s and
sold as an industrial and motor fuel, with production peaking in 1944.
Modern CSG production has been occurring safely and sustainably in
Queensland since 1996 and in south-western Sydney for over 10 years.
To produce CSG, we drill wells deep underground into the coal seams. These
wells are surrounded by steel and concrete to ensure they are separate from
other underground layers, such as water aquifers.
Then we remove the salty water that is trapping the gas in the coal seam. This
water is sent for treatment and reuse. The gas is then pumped through a network
of pipes to stations where it is compressed, purified and sent on to customers.
Sometimes we need to use a process called hydraulic fracturing to release
more gas from a well. This involves pumping a mixture of water, sand and small
quantities of chemicals into the coal seam at pressure to fracture it. The water
and chemicals are then pumped out and the sand remains in the coal seam,
holding open the fractures to allow more gas to be released.
COAL
GAS TO MARKET
WATER TO EVAPORATION POND
Typically 500 to 1200 metres
SEPARATORPUMP
Source: Energyindepth
JANUARY 2000 OCTOBER 2013
U.S. CO2
Emissions
(million metric tons)
U.S. Shale Gas Production
(billion cubic feet/day)
CSG and the environment
Natural gas is the cleanest burning fossil fuel. When used for electricity,
it produces nearly half the emissions of coal and uses less water.5
Using gas is one way that Australia and the world can reduce carbon
emissions. Emissions in the United States have fallen dramatically in
recent years, which many credit to their increased use of gas.
All CSG exploration and production in Australia occurs under strict
regulatory conditions enforced by State and Federal governments
to ensure it is done safely and sustainably.

4. Registered and Head Office
Ground Floor, Santos Centre
60 Flinders Street
Adelaide South Australia 5000
GPO Box 2455
Adelaide South Australia 5001
Telephone: 61 8 8116 5000
Facsimile: 61 8 8116 5050
www.santos.com
Interested in learning
more about natural gas?
Visit santos.com for more fact sheets
on a wide range of gas-related topics.
Santos – an Australian Pioneer
An Australian energy pioneer since 1954, Santos is
a leading oil and gas producer, supplying Australian
and Asian customers. With over 3,000 employees
across Australia and Asia, Santos’ foundations are
based on safe, sustainable operations and working
in partnership with host communities, governments,
business partners and shareholders.
Industry references
1. Gas Industry Social Environmental Research Alliance www.gisera.org.au
2. EnergyQuest February 2014 Quarterly, as at December 2013
3. Australian Department of Industry, ‘Eastern Australia Domestic Market Study’ 2013
4. Maranoa Regional Council, Dept. of Employment, ABS
5. U.S. Energy Information Administration, April 2014