$10bn Surat Gas Project in QLD to begin development in 2020

Monica Gameng   |   April 18, 2020

Another major development in Queensland is anticipated to begin construction this year and is set to aid in the State’s economic recovery from COVID-19 by creating over 1,000 jobs. 

“We have made very encouraging progress in managing the health impacts of this pandemic. 

“But it’s projects like this – and the more than 1,000 jobs it will generate – that will help us to our economic recovery,” Premier Annastacia Palaszczuk said. 

Arrow Energy has announced that it will commence works on the first stage of its $10 billion Surat Gas Project (SGP) located between Dalby and Wandoan in southern Queensland. 

“Today’s 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. 

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,” Arrow Energy CEO Cecile Wake said. 

Construction on the project is expected to begin later this year, with the first gas flow anticipated in 2021. 

The first stage works will create more than 200 construction jobs as well as provide millions worth of business opportunities for local suppliers. 

“The project, over all phases, will create up to 800 construction jobs and 200 permanent, operations jobs – Queensland's largest gas project to start since 2011,” Mines Minister Dr Anthony Lynham said. 

The Surat Gas Project is underpinned by 16 petroleum leases that covers approximately 2,500 kilometre-square on blocks between Dalby and Chinchilla. For this major development, Arrow Energy has been negotiating binding land access compensation agreements with landholders as well as getting them involved in the project’s field development planning. 

“Arrow has been part of southern Queensland’s economy for 20 years now, with a local workforce that predominantly lives in the region, raises their families there and spends their incomes there. 

Today’s announcement means continued work for them, and employment for the other workers that will be needed for the Surat Gas Project,” Ms Wake said. 

Once in production, the Surat Gas Project will bring an additional 5,000 petajoules of gas to market for over a 27-year period. This will include about 270 terrajoules a day during peak production of phase one and a peak of 700 terrajoules a day once fully operational. 

Majority of Arrow Energy’s Surat Basin gas is being contracted to Shell-QGC and it sells gas for Australian users and for LNG for export. 

The Surat Gas Project is located close to existing QGC facilities, which includes processing facilities and pipelines used for transport of gas to domestic as well as export facilities. 

With a significant third-party infrastructure collaboration agreement signed between Arrow Energy and Shell-QGC, Arrow Energy is allowed to utilise existing infrastructure which will help minimise project impacts on nearby communities and landholders, and this will also enable gas to be transported to market faster. 

“The utilisation of QGC’s existing upstream pipelines and treatment facilities enables Arrow to significantly reduce development costs, making the project competitive and economically attractive. 

“The Arrow joint venture partners’ decision not to build another two trains on Curtis Island provided the opportunity to create alternative pathways to market for the resource,” Shell Integrated Gas and New Energies Director Maarten Wetselaar said. 

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Source: Queensland Government; Arrow Energy; Shell; Industry Queensland 

Monica Gameng
As Felix's Marketing Assistant since 2015, Monica is responsible for researching and sharing new and progressing projects within the construction and mining sectors in Australia. It's no surprise that Monica has her finger on the pulse of Australian major projects given she has produced more than 1,000 posts. She truly is an industry expert.
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