Shell and PetroChina joint venture expands Surat gas project in Australia

Arrow Energy, a joint venture (JV) between Shell and PetroChina, has announced the commencement of phase two of development of the Surat Gas Project in Queensland, Australia.

Gas from Phase 2 of the development will be piped to the Shell-operated QCLNG plant on Curtis Island near Gladstone.

This is in line with a 27-year gas sales agreement between Arrow Energy and Shell’s QGC business, which aims to fulfil long-term contracts and supply to residential customers.

At peak production, Phase 2 is expected to contribute approximately 22,400 barrels of oil equivalent per day (bopd), or 130 million standard cubic feet per day.

This expansion is part of the Surat Gas Project, which is expected to produce over 4,000 PJ of gas over its lifetime, using up to 2,500 gas wells.

Construction is scheduled to begin later this year; plans include up to 450 new production wells.

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The infrastructure will also include various upgrades, such as a new field compression station, piping to connect the new field compression station to the central processing plant in Bellevue, and improvements to the water and brine plants.

The Arrow Energy joint venture was founded in 2010 by Shell and PetroChina.

The first phase of the Surat Gas Project (SGP), which included more than 600 wells, was approved in April 2020.

The second phase is designed to deliver gas volumes for processing via QCLNG’s infrastructure, with the first gas release expected in 2026.

QCLNG, a joint venture operated by Shell with partners CNOOC and MidOcean Energy, met 15% of gas demand on Australia’s east coast in 2023.

The production wells for the project will produce natural gas from coal seams in the Surat Basin.

Arrow CEO Zhengxin Peng said: “Natural gas is an important part of the energy transition and the expansion demonstrates our shareholders’ confidence in our ability to manage and implement large-scale projects.

“This means more jobs, more opportunities for local contractors and suppliers, including local businesses, and other economic benefits for the local community, including improvements to local roads.

“As in the first phase of the SGP, our agreement with Shell QGC will minimise our environmental footprint and community impact by allowing us to utilise existing facilities and infrastructure.”

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