Understanding Compensation

Landholders may be entitled to compensation from resource companies to mitigate the impacts of company activities and infrastructure on their property.

Understanding compensation

As a landholder, you may be entitled to compensation as part of a conduct and compensation agreement (CCA) to mitigate the impact of petroleum and gas development on your property.

Queensland legislation provides the basis for determining any compensation entitlement and the amount is dependent on the impact the proposed resource company activities will have on your property and/or lifestyle.

Compensation entitlements vary depending on whether you are the owner or an occupier of the property.

Compensation can also include professional costs reasonably incurred by you in negotiating a CCA such as valuation, accounting, taxation, agronomist or legal fees.

During negotiations with the resource company, it may be beneficial for you to seek professional advice when discussing the appropriate payment structure for compensation; for example, the proportion of upfront and annual payment.

The following information provides some guidance on what you should understand about your property and business operations to prepare for a discussion with the resource company. These are the key factors that are likely to be considered when discussing the compensation component of the CCA.

Proposed resource infrastructure

Compensation for infrastructure will depend on the area of land required, the length of time you will not be able to use this land and whether it is located on lifestyle, cropping or grazing land.

The resource company may provide you with the details of proposed infrastructure, including number, construction timing and location of the following:

Wells

A gas well is constructed on a well pad which is generally 1 hectare in size. You may not be able to use some or all of this area of land for the term of the CCA. 

Access roads

The resource company will need access to well pads and any other infrastructure for construction and maintenance purposes. These roads may be constructed to enable all weather access, particularly during the construction phase. Consideration should be given to collocating access roads with gathering lines to minimise the area of disturbance and interference to your operations. These roads are generally shared with you and may remain for your use after the CCA ends.

Gathering lines

Individual wells are connected to compression facilities via a network of low pressure polyethylene pipe lines. Compressed gas is then fed into high pressure pipelines for distribution via the national gas grid. Gathering lines are buried to a depth that should enable your normal grazing or irrigation operations to continue. Rehabilitation of the land can take time and can depend on seasonal influences such as rain and grazing pressure.

High point vents and low point drains

High point vents (HPVs) and low point drains (LPDs) may be necessary to optimise the movement of gas and water through the gathering lines. HPVs are installed in water lines to allow any remaining gas dissolved in the water to escape. LPDs are installed in gas lines to allow for the removal of any condensed water. Both HPVs and LPDs occupy relatively small areas of land along the gathering lines. The company will need to access these for maintenance purposes. You may not be able to use this area of land for the term of the CCA

Dams

In some cases, the resource company may need to construct a dam on your property to store water produced during operations. You may not be able to use this area of land for the term of the CCA. A dam may be left for you to use after the CCA ends, subject to your agreement and government approval 

Intensive infrastructure

The resource company may need to construct key infrastructure on your property such as a compressor facility or water treatment plant. These are essential to producing gas and connect to the national gas grid. These types of infrastructure vary in size, as does the area of land that may be required. You may not be able to use this area of land for the term of the CCA. 

Other infrastructure

Associated structures that the resource company may need for construction. May include laydown areas, workers camps, gravel pits or telecommunications towers. These structures may be temporary (only in use during the construction phase) or for the term of the CCA.

Severed land

When negotiating with resource companies, you may need to consider land that can no longer be used for the same purpose as before gas field development on your property because it has been isolated fully or partially by gas infrastructure.

Disturbance and losses during construction

‘Loss of quiet enjoyment’ during the construction phase includes impacts on your lifestyle such as noise, dust, security and privacy.

You should also consider time you may need to spend on additional activities during construction such as:

  • Mustering
  • Checking fences
  • Weed monitoring and management
  • Consulting with resource company representatives
  • Responding to requests from a resource company
  • Security
  • Administrative tasks

Ongoing disturbance during operations

Gas infrastructure needs regular monitoring, inspection and maintenance to ensure operational integrity and efficiency. This includes activities to ‘work over’ a well and maintain access roads.

Management time should be discussed with the resource company for activities such as:

  • Liaising with resource company representatives
  • Weed monitoring and management
  • Security
  • Working around infrastructure
  • Managing firebreaks
  • Additional property management
  • Disruptions to your other regular activities