WestSide Corporation

Date Published: 08/2012

WestSide Corporation Limited (ASX: WCL) was a publicly listed Brisbane-based coal seam gas (CSG) explorer and producer with certified reserves and a diversified portfolio of projects across Queensland. The company was strategically positioned to capture value from its gas resources through domestic market opportunities and downstream industrial applications.

High-Intensity Emissions Operations

WestSide operated the Meridian SeamGas coal seam gas fields, located 160 kilometres west of Gladstone in Queensland's Bowen Basin, in a joint venture with Mitsui E&P Australia. WestSide held a 51% interest, with Mitsui holding the remaining 49%.

The company also held 50% joint venture interests with QGC across several other CSG projects, including the Paranui, Tilbrook and Mount Saint Martin pilot projects in Queensland's Bowen Basin.

Additional exploration interests in ATP 974P and ATP 978P in Queensland's Galilee Basin provided longer-term growth opportunities through a joint venture with Mitsui.

Challenges of NGER Compliance

Compliance with the National Greenhouse and Energy Reporting (NGER) Act requires input from multiple business functions, including contractors, production teams, operations managers, finance teams and sustainability personnel.

As a first-time reporter, WestSide needed to establish clear governance structures, reporting responsibilities and documentation processes to meet its reporting obligations. Pangolin worked closely with WestSide to identify critical reporting roles and responsibilities, develop governance processes and ensure appropriate technical documentation was in place.

A key requirement under NGER is the preparation of a Basis of Preparation document, which outlines how an organisation has interpreted and applied reporting requirements, methodologies, assumptions and estimations.

Additional complexities included:

• Estimating greenhouse gas emissions uncertainty.
• Applying operational control principles to determine reporting boundaries.
• Managing reporting requirements across multiple joint ventures.
• Ensuring consistency in reporting methodologies and interpretations.

WestSide's extensive joint venture arrangements made documentation, governance and reporting consistency particularly important.

NGER Compliance Solutions

Pangolin Associates developed a comprehensive compliance program that included:

Emissions and Energy Source Identification

Identification of all greenhouse gas emissions and energy sources required to be reported under the NGER Act.

Custom Reporting Tools

Development of a tailored reporting tool to support data collection, calculations and reporting against both facility and corporate thresholds.

Reporting Framework and Methodology

Preparation of reporting methodologies and framework documentation covering:

• Scope 1 greenhouse gas emissions.
• Scope 2 greenhouse gas emissions.
• Energy consumption.
• Energy production.

Through its partnership with Pangolin, WestSide developed a clear understanding of its NGER obligations and established systems capable of supporting future growth in coal seam gas production.

The company implemented auditable reporting processes with clearly defined responsibilities, documented methodologies and robust data management practices aligned with the National Greenhouse and Energy Reporting (Measurement) Determination.

Regulatory Engagement and Industry Collaboration

Pangolin Associates managed liaison with the Department of Climate Change and Energy Efficiency (DCCEE) and sought guidance on technical requirements and interpretation issues. Potential reporting risks were identified and addressed early to support compliance outcomes.

Pangolin also engaged with the Australian Petroleum Production and Exploration Association (APPEA) to help ensure consistent interpretation of reporting requirements across the industry.

Carbon Pricing Impact Assessment

In 2012, WestSide commissioned Pangolin to model the potential impacts of the Carbon Pricing Mechanism (CPM) through Pangolin's Carbon Strategy and Risk Report. The assessment helped WestSide understand potential supply chain cost increases and supported commercial negotiations with a major customer.

The report included:

• Financial modelling based on products and services procured during a typical trading year.
• A detailed carbon pricing risk exposure profile.
• Analysis of likely impacts over the first four years of the Carbon Pricing Mechanism.
• Quantification of operating cost impacts.
• Carbon risk management and emissions reduction strategies.

The methodology underpinning the assessment was developed by the Integrated Sustainability Analysis Research team at the University of Sydney.