Anglo-Dutch energy giant Royal Dutch Shell will start development of Arrow Energy's Surat gas project in Australia amid global economic turmoil caused by coronavirus pandemic and low oil prices.
In a statement on Friday, Shell said the decision to approve the first stage of Arrow Energy’s development in Queensland would carry natural gas to market at peak output of up to 90 billion cubic feet per annum.
'The Surat Gas Project is the first large-scale CSG [coal seam gas] 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,' Arrow Energy said in a statement.
'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,' Arrow Energy CEO Cecile Wake said.
Arrow Energy directly owns five gas fields in the Surat and Bowen basins in southern and central Queensland, and provides the equivalent of more than 40% of overall domestic gas production in Queensland.
The world's largest LNG exporters, Qatar and Australia, have exported nearly 88 million and 78 million tonnes of LNG respectively in 2019.
By Sibel Morrow