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TRADING in Cougar Energy shares on the Australian Stock Exchange (ASX) has been suspended at the company’s request while it awaits the results of a review of groundwater samples taken in the vicinity of its underground coal gasification project near Kingaroy in Queensland.

The company advised the ASX that Queensland’s Department of Environment and Resource Management (DERM) requires the review by its UCG Expert Panel of three scientists to be completed before an Environmental Protection Order can be lifted to allow the project to resume operations.

The Kingaroy plant was closed down late last week after traces of toluene and benzene were found in samples of groundwater taken nearby. However preliminary analysis has found that neither of the contaminants was present at dangerous levels. The level of benzene was 0.7 ppb, compared to the Australian Drinking Water Guideline (ADWG) minimum standard of 1 ppb, while toluene at 4.4 ppb was also much lower than the ADWG minimum standard of 800 ppb.

DERM director general John Bradley says the trace levels of hydrocarbons were 95% lower than the AWDG standards and do not represent risk to human health.

"Neither benzene or toluene have been detected in the latest three testing results and no results were recorded at unsafe levels,” Bradley says.

DERM says it had advised property owners within 2 km of the UCG plant and the bore where the samples were taken to not use water from groundwater bores for human consumption or stock watering until further advice.

Cougar says the DERM results are consistent with its own testing and noted “that there have been many uninformed statements in regard to the Kingaroy project and possible health issues”.

Earlier the ceo of the Queensland Farmers Federation, Dan Galligan, said the presence of benzene and toluene in groundwater would alarm farmers in the region.

“Farmers have been very vocal in expressing that the underground water supply must be protected at all costs when underground gas is being extracted,” Galligan said.