Shell approves Phase 2 of Australia’s Surat gas project – News

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SHELL is investing in the second phase of its Surat gas project in Queensland, Australia, aiming to increase gas supplies to the country despite warnings of impending shortages.

The Surat Gas Project is operated by Arrow Energy, a 50/50 venture between Shell and PetroChina. It produces gas from onshore coal seams in Queensland, with the first phase involving more than 600 wells. The second phase will drill a further 450 wells and build a 121 TJ/d field compression station and a 27km medium-pressure pipeline to connect the new supplies to a processing plant. Ultimately, the gas will be piped to the Shell-operated LNG plant on Curtis Island for export and supply to the domestic market, Shell said.

This second phase will have a capacity of 130 m².³ Gas, production is scheduled to begin in 2026.

Earlier this year, Australia’s Energy Market Operator warned that the east coast market could experience seasonal gas supply shortages from 2026 and that urgent investment was needed to meet demand from households, businesses and the energy industry.

Zhengxin Peng, CEO of Arrow, said: “At a time when more gas is needed for homes, businesses and industry, the development of SGP North will cement Arrow’s position as a major natural gas producer on the East Coast.”

There are environmental tensions over efforts to increase gas supplies to bridge the transition from coal-fired power to renewables as the country tries to cut its emissions targets by 43% by 2030. Last week, reports emerged that Woodside’s Browse LNG project is facing opposition from Western Australia’s Environment Agency.

Meanwhile, Chevron is seeking approval to drill new offshore wells to increase supplies to Australia’s largest liquefied natural gas facility – the Gorgon project off the coast of Western Australia.