Arrow Energy, Shell’s QCLNG ink gas deal for Australian east coast

Queensland company, Arrow Energy, signed one of the largest gas supply deals on Australia’s east coast, to bring to market its significant gas reserves in southern Queensland.

The 27-year deal between Arrow and the Shell-operated QCLNG joint venture will commercialize the majority of Arrow’s gas reserves of approximately 5 trillion cubic feet in the Surat Basin, the company said in a statement on Friday.

Arrow Energy CEO, Qian Mingyang, said the company’s equal shareholders, PetroChina and Shell, had approved Arrow’s execution of a binding gas sales agreement (GSA) following 18 months of detailed work on upstream collaboration agreements.

“Collaboration between the parties will see use of existing QGC-operated infrastructure such as gas compression, processing and transmission infrastructure as well as water transport and treatment facilities,” Mingyang said.

He said phased development activity would commence from the expansion of Arrow’s Tipton fields, near Dalby, and build to new development areas from around 2021.

The current Queensland total gas supply is around 1,450PJ/yr (4,000TJ/d), of which Queensland residential and industrial demand is approximately 178PJ/yr.

“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,” Qian said.

Arrow Energy said it is continuing to progress development options in the Bowen Basin in Central Queensland where it operates one of the oldest and geographically largest domestic gas projects, namely the Moranbah gas project, owned jointly with AGL Energy, for electricity and industrial uses.