The Queensland Government has awarded Arrow’s wholly-owned subsidiary, Surat Gladstone Pipeline, a Petroleum Pipeline License (PPL 144) to develop a 470km buried high-pressure steel gas transmission pipeline between Arrow’s CSG operations near Dalby in the Surat Basin and the proposed Fisherman’s Landing LNG plant.

The Surat Gladstone Pipeline will extend north-west from Dalby to Chinchilla before traveling north through the Banana Shire to Gladstone.

The pipeline will initially deliver around 90 PJ of coal seam gas per year to the Fisherman’s Landing LNG plant to meet a proposed export contract for 1.5m tonnes per annum (mpta) of LNG. The addition of mid point compression will take the pipeline capacity to 3.4mtpa, further addition of full looping of the pipeline will expand capacity to 6.8mtpa.

It is anticipated that construction of the pipeline will start in 2011, with first gas supplied to the Gladstone LNG Plant at Fisherman’s Landing in late 2012. The capital cost of the pipeline project is yet to be finalized but remains within prior guidance of circa $550m.

The company said that the pipeline construction project has been through a competitive tender process and is now in an early contractor involvement phase with two proponents under consideration. The pipeline will be built under a Design and Construct contract in which Arrow will directly source and supply the steel pipe.