Arrow Energy has endorsed the commencement of the first phase of its Surat Gas Project (SGP) in southern Queensland, with construction set to begin this year.
Arrow’s decision follows the announcement from its shareholders, PetroChina and Shell, of a final investment decision (FID) for phase one of the SGP.
Arrow CEO Cecile Wake said the 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.
“The Surat Gas Project is the first large-scale CSG project in Australia to be underpinned by a significant infrastructure collaboration and gas sales agreement, together with a suite of supporting agreements, which have been put in place between Arrow and the Shell-operated QGC joint venture,” she said.
“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.”
Minister for Resources, Water and Northern Australia Keith Pitt said the Australian Energy Market Operator has highlighted that new gas is going to be required into the east coast market by 2024.
“Arrow is going to be an important part of delivering that new gas,” Minister Pitt added.
“It will deliver up to 270 terrajoules of gas a day, or around 100 petajoules a year, for both the domestic market and for export,” Minister Pitt said.
He said that Arrow’s announcement is a green shoot of confidence that the energy and resources sector will be part of the economic bounceback.
“Notwithstanding COVID-19, our energy and resources will be important in getting not just our economy back on its feet, but vital in assisting our important trading partners to kickstart their economies.”
Ms Wake said Arrow would this year commence construction of more than 600 phase one wells and is on track to deliver first gas from the project in 2021. Over the full 27 year life of the Surat Gas Project, Arrow expects to develop around 5 TCF of natural gas.
“An initial 200 construction jobs will be created during phase one, with an anticipated further 800 construction and operating roles over the life of the Surat Gas Project,” Ms Wake said.
“Arrow recognises the current uncertainty caused by COVID-19 and oil-price volatility and will ensure that its development plans retain sufficient flexibility to manage these evolving challenges while bringing more gas to market.”
Arrow currently operates five gas fields in the Surat and Bowen basins in southern and central Queensland, respectively, and produces the equivalent of more than 40 per cent of Queensland’s total domestic gas demand.
“This FID is the result of extensive collaboration between not just Arrow and the QGC joint venture, but also with landholders, communities and the State Government.”
Ms Wake said there have been sustained efforts by Arrow, its landholders and local communities to jointly develop tailor-made ways of working on high quality black soil with minimised impacts,
“[This] will be the foundation of positive co-existence into the future.”
