Compensation forms an important part of access agreements, which are required prior to landowners granting permission to gas companies to access their property to drill for gas.
As part of the access and compensation agreement, the landowner is compensated for any disturbance during construction and is generally paid annually on an individual well basis.
The level of compensation is dependent upon the type of activity being undertaken, however AGL’s compensation principles includes the payment of the landowner’s time; reasonable costs for professional services including legal and valuation; initial works payments for disturbance during construction; and, annual compensation based upon a rental fee of the disturbed area which takes into account land value and land use.
Ms Westgate says that a key benefit for landholders working alongside industry is the financial support that this compensation for land access can provide in times of drought, while also contributing to maintenance and repair costs.
“Compensation is considered by many landowners as a guaranteed income stream for the duration of the well life,” Ms Westgate says.
“Landowners see this as being beneficial as it supplements their income, particularly through times of drought.
“Apart from financial contributions, the operators in the gas industry can often provide improvements to the land, for example access roads, fencing and water bores.”
AGL currently has more than 50 agreements in place across its Camden and Gloucester Gas Projects in NSW.