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Arrow Energy signs gas supply deal for Shell’s QCLNG project

Arrow Energy has signed a long-term agreement for gas supply to Shell's Queensland Curtis Liquefied Natural Gas (QCLNG) project.

Under the 27-year gas sales agreement signed with Shell-operated QCLNG joint venture, Arrow Energy will annually supply gas from its reserves in Surat Basin in Queensland.

Arrow Energy, which is equally owned by Shell and PetroChina, is developing Coal Seam gas (CSG) reserves in the Surat Basin in Southern Queensland, and the Bowen Basin in Central Queensland.

Arrow said that the agreement will commercialize the majority of its reserves in the Surat Basin. It has gas reserves of approximately 5 trillion cubic feet in Surat Basin.

Arrow Energy CEO Qian Mingyang said that the deal follows 18 months of detailed work on upstream collaboration agreements.

Mingyang said: “The deal offers long-awaited infrastructure collaboration in the natural gas industry, creating better cost efficiencies and enabling us to bring this gas to market in a challenging investment climate.”

The firm noted that the collaboration will see the use of existing QGC-operated existing gas pipeline and related infrastructure in order to reduce impacts to landholders and to communities.

Mingyang added: “Collaboration will accelerate first gas production to approximately 2020, bringing an additional 240 petajoules per year (PJ/yr) or 655 terajoules per day (TJ/d) of gas to the Queensland market at peak production.”

Starting from 2021, Arrow plans to commence phased development activity from the expansion of its Tipton fields, near Dalby, and build to new development areas.

The work is expected to create around 800 jobs during construction and around 200 jobs during operational phase.

Commenting on the deal, Queensland Resources Council (QRC) CEO Ian Macfarlane said: “This one agreement alone will deliver enough extra gas to more than power Queensland’s entire industrial demand every year out to 2047.”