The Australian Gas Light Co., the country's biggest power retailer, said on Wednesday it had entered a A$93 million joint venture arrangement with Sydney Gas Ltd. to accelerate development of the latter's coal-seam gas assets.

Also on Wednesday, coal-seam gas producer Arrow Energy NL and energy infrastructure company Alinta Limited signed a A$27 million deal to build a 27.4 megawatt gas-fired power station in Queensland.

And on Monday Beach Petroleum Ltd. said it would spend A$35 million for Arrow's ongoing gas exploration efforts in coal seams in Queensland's Surat Basin.

Australia, the world's largest coal exporter and one of the first countries to begin commercialisation of coal-seam methane, has large coal deposits along the length of its eastern seaboard, with current government projections suggesting the resource can sustain production for the next 200 years.

Methane is held in coal-seam cracks and its extraction offers reduced greenhouse emissions, safer mining conditions and a valuable source of fuel in times of soaring energy costs.

In a boost to the industry, the Queensland government has required that by January, 13 percent of electricity to be generated by gas, of which around 25 percent is sourced from coal seams.

"It's certainly a buoyant sector of the industry, with lots of anticipation about growth given the investment in infrastructure and the significant gas sales contracts signed," said Ray Slater of the Queensland Department of Natural Resources and Mines.

New South Wales still has no specific targets, but since 2003 it has had a greenhouse gas reduction scheme under which coal-seam methane electricity generators are among those who receive abatement certificates that can be sold to dirtier generators.

This week's developments follow Santos Ltd.'s July acquisition of Tipperary Corp., giving it access to coal-based methane gas fields outside Brisbane, and CH4 Gas' A$300 million deal in May to supply coal-seam methane to BHP Billiton's Queensland nickel refinery.

Despite the various investments, analysts remain cautious on the resource, notably due to the cheaper alternative of coal-fired generation and the availability of rival gas sources.

"There's no doubt it's a viable fuel for generation," said JP Morgan analyst David Leitch. "But it's no better or worse than any other kind of gas, and there's a question mark over gas generally, while coal remains cheaper without a carbon tax."

AGL, which has also signed a 10-year A$600 million gas purchase contract with Sydney Gas, and second-place retailer Origin Energy Ltd. have both said they expect strong growth in gas demand in Australia's eastern states.

As natural gas resources decline, Australia's coal-seam methane is earmarked as an alternative, alongside overseas sources such as Oil Search Ltd's Papua New Guinean gas pipeline in which AGL took a 10 percent equity stake in July.