Upstream Gas Upstream Gas advances AGL’s position  in the long-term security of gas supply  by pursuing a number of value-creation  strategies that build a portfolio that fi lls  the gap between the contracted gas  supply and customer demand. Upstream Gas is responsible for advancing AGL’s position in  achieving long-term security of gas supply. It also has investment  positions in companies involved in exploring the possibilities of  developing geothermal energy sources. The gas portfolio is divided into two broad regions:  (i) Queensland/South Australia; and  (ii) New South Wales. The Queensland/South Australia portfolio includes AGL joint venture  interest in the Moranbah Gas Project, and other joint venture  interests in the Galillee Basin, the Cooper Basin, and at Spring Gully.  It now also includes interests acquired during the year following the  successful acquisition of Mosaic Oil N.L. The New South Wales portfolio includes the Camden Gas Project,  and assets in the Sydney Basin (which includes the Hunter Valley)  and at Gloucester. These assets are wholly owned and operated  by AGL and are close to AGL’s core New South Wales gas market When conducting a heritage assessment for the potential  future development of the Torrens Island Energy Park,  the AGL team sought the input of the local Kaurna people.  This led to the repatriation of 68 Kaurna ancestors within  the Torrens Island Conservation Park, some almost 200  years after their removal. Through the support provided by AGL, the Kaurna people  have reclaimed ancestral remains held by the South  Australian Museum and obtained permission for the reburial  within the Conservation Park. A number of signifi cant  cultural ceremonies have also been conducted, including  a traditional ‘Sorry Ceremony’ during which Kaurna elders  were finally able to bury their ancestors in a traditional  resting place. Kuarna ancestors find their way home It will also help AGL better manage its gas supply during seasonal  variations in demand in peak summer and winter periods. The capital cost of developing the gas storage facility was  underwritten by a seven year contract to provide gas storage  services to QGC Limited (a BG Group Company). The agreement  with QGC will produce gas storage fees of approximately $8 million  to $10 million per annum over the next three years. With its initial  storage capacity of 35 PJ, the reservoir will store gas to support  BG’s development of a liquefied natural gas facility in Gladstone. Following completion of the acquisition of Mosaic, AGL redeveloped  the underground gas reservoir as a gas storage facility.  In October, AGL acquired Mosaic Oil N.L. through a court approved  scheme of arrangement. In addition to permits for conventional oil  and gas exploration and production, the acquired assets of Mosaic  included the depleted Silver Springs/Renlim gas fields, an ideal  underground gas storage location. Silver Springs Underground Gas Storage Project Gas Storage Growth in Gas Reserves Financial Performance Operating EBIT for the year was $13.6 million, an increase of  $8.1 million on the previous year. The increase was due mainly to  the receipt of income from the provision of gas storage services.  This is discussed in more detail below. At year end, 2P reserves were 2,089 PJ, an increase of 32.4% on the  previous year. Successful exploration activities resulted in the first  booking of gas reserves in the Hunter Valley (142 PJ). AGL’s share of gas reserves in the Bowen Basin in Queensland  increased by 310 PJ during the year. The acquisition of Mosaic  Oil N.L. added a further 65 PJ of 2P reserves. The Galilee Gas Project (ATP 529P), in which AGL holds a 50%  joint venture interest, has announced its first resource estimation  of 259 PJ of 2C resources. The ability to store gas for use during periods of peak demand will  become an increasingly important asset in maintaining continuity  of gas supply – to our gas customers and to our own gas-fired  generation assets. During the year, AGL made substantial progress  in advancing two gas storage projects. 30 Review of  Operations