The development programme will involve drilling more than 100 wells, and significant upgrades to gas processing, at its 90 per cent owned Berwyndale South Gasfield in the Cooper basin.
The Cooper Basin, which straddles the Queensland and South Australian border, contains the largest known gas reserve in the country.
"With the AGL deal, we had $289 million in the bank on March 31, and if we sell 30pj, we’ll have enormous cash flows as well," managing director Ricard Cottee told AAP.
"So it’s going to be funded out of that $289 million plus cash flows but we will probably borrow some money as well.
"We don’t need to, but the bank’s always happier to lend you money when you don’t need it."
QGC also announced it had allocated an additional $56 million, on top of the $260 million development project, to an exploratory drilling program about 50 kilometres south of Brwyndale South.
The company currently has proven, probable and possible gas reserves of 2,755 pj.
"This investment extends QGC’s position as the rising independent gas producer on the Australian east coast," Mr Cottee said.
Mr Cottee said QGC needed to expand its production capacity to meet steadily increasing demand for natural gas as an environmentally cleaner, low cost alternative to coal.
"QGC’s aim is to ensure it has sufficient production capacity to supply new power stations currently being built in Queensland and New South Wales," Mr Cottee said.
QGC has already commenced development of a 135-megawatt combined cycle gas-fired power project to be owned by a subsidiary of Infrastructure Trust, which is backed by ANZ Bank, scheduled to begin operation in August 2009.
© 2007 AAP