Shell Australia (Shell) has taken a final investment decision to develop the first phase of Arrow Energy’s Surat Gas Project in Queensland, Australia. This decision will bring up to 90 Bcf (2.5 x 109 m3) per year of new gas to market, which will flow to Shell-operated QGC to be sold locally and exported through its plant on Curtis Island. QGC is one of Australia’s leading natural gas producers. It produces natural gas from wells drilled into coal seams in the Surat Basin. Operations include more than 2600 production wells, 24 field compression stations, six central processing plants, two water treatment plants, and a two-train liquefied natural gas (LNG) export facility on Curtis Island.
“The utilization of QGC’s existing upstream pipelines and treatment facilities enables Arrow to significantly reduce development costs, making the project competitive and economically attractive,” said Maarten Wetselaar, Integrated Gas and New Energies Director at Shell. “The Arrow joint venture partners’ decision not to build another two trains on Curtis Island provided the opportunity to create this alternative pathway to market for the resource. The approach we have taken to this investment is aligned with Shell’s focus on actively managing all operational and financial levers to deliver sustainable cash flow generation. It reflects our disciplined approach to capital spend, which takes a long-term view of the fundamentals of supply and demand.”
“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,” said Shell Australia Chairman Tony Nunan. “QGC supplied 16% 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.”
Construction of the project will begin in 2020, with first gas sales expected in 2021.