Dairy company goes MOU

Richmond Dairies in Casino has signed a memorandum of understanding (MOU) with Metgasco to supply gas.

Richmond Dairies produces frozen dairy, specialty powder and bulk dairy products and uses gas and electricity to power their production processes and refrigeration. Director Chris Sharpe said the MOU could help Richmond Dairies’ bottom line.

“In simple terms, what it means for Richmond Dairies is that it should give us a more economically-viable alternative for power supple at our factory, help reduce costs and provide environmental benefits. At the moment most of our gas supply comes in a tanker, so obviously with a pipeline that means vehicles off the road,” Mr Sharpe said.

Mr Sharpe said he wasn’t concerned that some of their suppliers might be opposed to the coal seam gas industry.

“I think this type of discussion is a positive, it gets all the issues on the table and hopefully all the parties can work together for a satisfactory outcome,” he said.

Metgasco has approval for the Richmond Valley Power Station and is proposing to build gas pipelines accessing coal seam and conventional gas in the Northern Rivers.

“The Richmond Dairies Memorandum Of Understanding is very important to us – it is our first gas sales opportunity. We aim to support local industry with gas supplies as part of our overall development and growth plans,” Metgasco CEO Mr Henderson said.

It is expected that a final gas sales agreement will be confirmed by the end of 2011 and, subject to environmental and production licences approvals, first sales can be made by the end of 2012.

“We are seeking to supply gas to a number of customers and to generate electricity. This gas can come from either coal seam gas wells or conventional wells,” Mr Henderson said.

NSW Farmers Association Mining Taskforce chair Fiona Simson advocated caution.

“If Metgasco is going to supply gas as a cheaper power source, you could understand why local companies would be interested and Metgasco has to get contracts signed to ensure their financial viability but the questions we see as much more fundamental are about where the wells are going to be located,” Ms Simson said. “The NSW Farmers Association is concerned that the coal seam gas industry is currently operating without understanding all the impacts. In a lot of aspects it is operating without hydrological and geological data in an environment where legislation for land-owners and the community is not adequate. We are not opposed to the industry as such but we are cautious about project approvals under the previous framework.”

The NSW Government recently announced a review of the gas industry, including a 60-day moratorium on new exploration licences, due to expire at the end of June, and assessments to include impacts on agriculture.