Arrow Energy, a joint venture (UV) between Shell and PetroChina, has announced the commencement of Phase 2 development of the Surat Gas Project in Queensland, Australia. The British oil and gas giant made the announcement on Monday, amid calls for more investment to boost local energy supply.
The development is in line with a 27-year gas sales agreement between Arrow Energy and Shell’s QGC business, aiming to fulfil long-term contracts and cater to domestic customers.
This expansion is a part of the overall Surat Gas Project, which is projected to produce over 4,000PJ of gas throughout its lifetime, utilising up to 2,500 gas wells. Construction is set to commence later this year, with plans including up to 450 new production wells.
Shell did not give any cost estimate for the second phase of development, but said it was expected to contribute around 22,400 barrels of oil equivalent per day at peak production and first gas was expected in 2026.
“At a time when more gas is needed for homes, businesses and industries, the SGP North development will solidify Arrow’s position as a major producer of natural gas on the east coast,” said Arrow CEO Zhengxin Peng.
“Natural gas is an important part of the energy transition, and the expansion demonstrates the faith our shareholders have in our ability to manage and deliver large-scale projects, he added.
“It means more jobs, more opportunities for local contractors and suppliers, including indigenous businesses, and other economic benefits for the local community, including upgrades to local roads.
“Like the first phase of the SGP, we will be minimising our environmental footprint and impact to the community through our agreement with Shell QGC, which enables us to use existing facilities and infrastructure.”
