Arrow Energy has been granted environmental approval to drill 55 coal seam gas wells near a site contaminated with benzene, naphthalene and cyanide in western Queensland.
The project is an expansion of the Shell and PetroChina joint venture's existing six-well facility at Hopeland near Chinchilla on the western Downs.
The Department of Environment and Science says there are "strict conditions" on the environmental authority (EA) obligating Arrow to monitor any potential movement of contaminants from the site of Linc Energy's failed underground coal gasification project.
The department says Arrow must expand the number of bores in its existing groundwater monitoring network, have a program to detect changes to groundwater, and monitor all groundwater points at identified locations every quarter.
"The department will conduct regular compliance of the EA, including planned and unplanned site inspections, and assessing groundwater information to ensure Arrow are complying with their environmental obligations," the DES said in a statement on Friday afternoon.
"As the environmental regulator, DES will take compliance action including fines, the issue of statutory orders or prosecution if the conditions are not met or the Environmental Protection Act 1994 is contravened.
"The Queensland Government will continue to monitor results from DES-installed monitoring bores both on and near the former Linc Energy site."
Linc operated four underground coal gasification sites where it burned coal to produce gas between 2007 and 2013, but that caused the ground to fracture allowing toxic gasses to leak into the groundwater.
It tried to seal the cracks with concrete and use wells to control pressure, but the gasses kept leaking until local landholder complaints lead to the biggest environment department investigation in Queensland history.
Linc went into voluntary administration in April 2016 before being slapped with a $4.5 million penalty in 2018 on five counts of wilfully and unlawfully causing environmental harm.
Brisbane District Court found the company guilty in 2018 of causing damage by allowing toxic gas to leak from its underground coal gasification sites.
The department said in November 2022 that more than 180 groundwater samples from Linc Energy sites had tested positive for contaminants including benzene, naphthalene and cyanide.
However, it said, a further 130 samples from nearby landholder bores taken since 2015 showed they had not been contaminated and landholders were notified as recently as late 2021.
Tests from monitoring bores on the nearby Kummerows Rd reserve found benzene and cyanide in 2021.
The department rejected suggestions it had failed its legal obligation to notify landholders about the contaminants.
Arrow applied for an environmental authority to increase the number of gas wells by 55 and the surface area of its nearby Hopeland project in October 2021.
