Arrow Energy’s Surat Gas Project set to kick off

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Arrow Energy has sanctioned commencement of the first phase of its Surat Gas Project (SGP) in southern Queensland, with construction set to begin this year.

Arrow’s sanction decision follows its 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.

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“This significant investment comes at a critical time and will cement Arrow’s position as a major producer of natural gas on the east coast,” Ms Wake said.

“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.

“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.”

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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. The decision to sanction phase one of the Surat Gas Project and commence construction this year is good for Queensland. It will mean more jobs, more opportunities for local companies and other economic benefits for regional Queensland, which has been home to Arrow for more than 20 years.”

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.