First phase of Surat Gas Project to bring a maximum of 90bcf of gas per year to the market


Investment decision made on Arrow’s Surat Gas Project. (Credit: Arrow Energy Pty Ltd)

Arrow Energy, a 50:50 joint venture between Shell Australia (Shell) and PetroChina, has made final investment decision to develop the first phase of $7.1bn Surat Gas Project in Queensland, Australia.

The first phase of the Surat Gas Project is expected to bring a maximum of 90 billion cubic feet (bcf) per year to market.

In 2020, Arrow Energy plans to start construction of more than 600 phase one wells and with first gas deliver from the project scheduled in 2021.

Expected to create up to 1,000 jobs, the Surat Gas Project will have the capacity to develop around 5 trillion cubic feet (TCF) of natural gas, over its 27 years of operational life.

In December 2017, Arrow Energy entered into a 27-year deal with the Shell-operated Queensland Curtis LNG (QCLNG) joint venture to commercialise the majority of its gas reserves in the Surat Basin, which represents about five trillion cubic feet of coal seam gas.

QCLNG (QGC) is a joint venture between Shell (73.75%), CNOOC (25%) and Tokyo Gas (1.25%).

Shell Australia chairman Tony Nunan said: “QGC has reached strong and stable production since its start up in December 2015, and Arrow has the strong technical capability to develop the Surat Basin fields innovatively and efficiently.

“QGC supplied 16 percent of the demand in the Australian east coast domestic gas market in 2019 and celebrated its 500th LNG cargo. Gas from Arrow will provide more supply to both Australian domestic customers and export markets.”

Surat Gas Project to use existing QCLNG infrastructures

Arrow Energy’ plans to make use of the existing QCLNG infrastructures including processing facilities and pipelines for the Surat Gas Project to reduce development costs, and make it competitive and economically attractive.

Arrow CEO Cecile Wake said: “Today’s decisions by PetroChina, Shell and Arrow demonstrate commitment to and confidence in Queensland and the Australian market at a time of global economic turmoil from COVID-19 and against the backdrop of sustained low oil prices.

“This agreement enables the use of capacity in QGC’s existing gas and water processing, treatment and transportation infrastructure, reducing the impacts on landholders, communities and the environment and ensuring that more gas can be economically developed.”