Major expansion proposed for Arrow gas project

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Arrow Energy today announced it would undertake the front-end engineering design (FEED) phase for a proposed major expansion of its Tipton gas project.

The project is located 30 kilometres west of Dalby in Queensland’s Surat Basin.

Arrow Energy chief executive officer Qian Mingyang said the project involved a significant upgrade of existing facilities, and would more than double production capacity from Tipton to more than 80 TJ/d.

“This project continues the development of the Arrow resource which will see more gas in the market,” Mr Qian said.

The project followed a $600m investment by Arrow in its Surat Basin infrastructure, comprising the $500m Daandine expansion project (commissioned in late 2016) and commencement of a $100m Produce the Limit (PtL) project earlier this year, to expand capacity at its Daandine and Tipton fields.

The Tipton expansion FEED contract would be awarded within weeks through the company’s engineering master service agreement.

“The planned expansion of Arrow’s Tipton operations is expected to involve 90 new wells in the initial phase and another 180 wells over the next 25 years – along with new gathering lines, an upgraded water treatment facility and four new compressors,” Mr Qian said.

“The PtL project is well under way, and will enable Arrow to run existing compression facilities to their maximum design limits, increasing our current Surat production by up to 30 per cent.”

Together, the expansion projects (Daandine, PtL and Tipton) would bring Arrow’s Surat gas production to more than 170 TJ/d, for both domestic and export use.

They represent a strong commitment by Arrow to the development of its Surat Basin reserves despite challenging economic conditions.

Mr Qian said after FEED was complete, shareholders would consider a Final Investment Decision.

He said in addition to these expansion activities, collaboration with industry proponents would be important in bringing Arrow’s sizeable gas reserves into the east coast gas market.

“I am expecting that we will reach agreement on a path to market for the majority of Arrow’s Surat Basin gas reserves later this year,” Mr Qian said.

APPEA Queensland director Rhys Turner said Arrow’s announcement showed that Queensland-based operators continue to do the heavy lifting in getting more gas to market.

“This initiative – coupled with the recent announcement by QGC, a Shell joint venture, that it will soon start drilling up to 161 additional wells as part of Project Ruby – shows the industry in Queensland is getting on with the job,” he said.