Shell is set to invest in the next phase of Arrow Energy’s Surat Gas Project in Queensland, Australia, to secure ongoing gas supply for both domestic customers and its Queensland Curtis liquefied natural gas (QCLNG) export terminal.
Arrow Energy is an incorporated joint venture (JV) equally owned by Shell and PetroChina.
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Shell confirmed that production from the new phase, known as Surat Gas Project Central, is expected to begin in 2028.
The development comprises 143 backfill wells, designed to deliver around 79 million standard cubic feet, or approximately 84 terajoules, of gas per day at peak output.
Gas will be supplied to the Australian domestic market as well as international liquefied natural gas (LNG) clients through the QCLNG facility, operated by Shell on Curtis Island near Gladstone.
This supply arrangement falls under an existing 27-year sales agreement between Arrow Energy and the Shell QGC-operated QCLNG JV.
Shell Australia executive vice-president and country chair Cecile Wake said: “Gas is a stabilising force in the energy system as we decarbonise and Australia is best served by having a strong and well-supplied domestic market, underpinned by a thriving export sector.
“Continuing to invest in gas development is critical to domestic energy security, meeting our export contracts, as well as supporting employment and economic activity in regional Queensland.”
Arrow Energy was established in 2010 and the long-term gas supply agreement with QCLNG was signed in 2017.
The QCLNG venture comprises Shell with a 73.75% stake, CNOOC with 25% and MidOcean Energy with 1.25%. QCLNG supplied 15% of the gas demand on Australia’s east coast in 2023.
The Surat Gas Project sources natural gas from coal seams in the Surat Basin. Located approximately 160km west of Brisbane, the project covers an area from Wandoan in the north to south-west of Millmerran, spanning seven production licences.
Arrow Energy plans to extract approximately five trillion cubic feet of gas over the project’s 27-year lifespan. First gas from the project was delivered in 2021, following environmental approval in 2013 and an initial investment decision in April 2020.
