The heads of agreement between BHP and Energy Developments covers the combined 97MW stations.

The agreement is for four years. BHP has also extended tenure on the sites for 10 years from 2016 to 2026.

It is proposed the agreement will optimise generation capacity for BHP’s future mine plan.

Energy Developments will dedicate 76MW of the existing capacity to use waste coal mine gas from BHP and retain the right to use the remaining 21MW surplus capacity for sale into the electricity grid.

Energy Developments has owned and operated the Appin stations since 1997 under an existing gas conversion agreement which was set to expire in 2012.

The Appin stations are the largest waste coal mine gas power stations in Australia and among the biggest in the world.

The use of waste coal mine gas for power generation helps abate fugitive methane emissions, with Energy Developments estimating the Appin stations abated 2.2 million tonnes of carbon dioxide equivalent and exported more than 440,000 megawatt hours of electricity in the 2009 financial year.

Energy Developments was trading unchanged today at $2.74.