Brisbane, 9 October (Argus) — Australia's Queensland state will introduce a cash bidding process for new releases of highly prospective coal and coal-bed methane (CBM) gas exploration acreage.

"Through competitive cash bidding, companies will bid for the right to explore highly prospective land made available through tender and a 'preferred tenderer' will be identified through a rigorous assessment process," Queensland resources minister Andrew Cripps said today. “Preferred tenderers will still have to meet the same stringent environmental and tenure approval requirements before exploration tenure is granted."

The move follows a similar move by the neighbouring state of New South Wales to introduce competitive tendering for highly prospective exploration areas.

Cash bidding is seen as giving preference to larger companies because small-scale operators cannot afford to compete. But the Queensland government says it will keep some less prospective exploration land releases that will not require cash bids.

The introduction of bidding for CBM exploration leases comes as competition for gas in Queensland heats up ahead of the start-up of the first of three LNG export plants at Gladstone port from 2014. Domestic gas customers complain that they are unable to secure gas contracts from 2014, with expectations of a gas shortage in the state by 2015-16 as all three Gladstone LNG projects ramp up to full production. The Gladstone LNG projects will also be looking to secure more gas to underpin any expansions.

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