$10 billion gas project to start construction this year

A FINAL investment decision from Shell Australia has given the green light to the first stage of Arrow Energy's long-awaited $10 Billion Surat Gas Project in southern Queensland. 

Premier Annastacia Palaszczuk said the project would mark another milestone in Queensland's economic recovery from COVID-19.

"We have made very encouraging progress in managing the health impacts of this pandemic," the Premier said.

"But it's projects like this - and the more than 1,000 jobs it will generate - that will help us to our economic recovery."

Mines Minister Dr Anthony Lynham welcomed Arrow's decision to move ahead on the first stage of the project between Dalby and Wandoan, after Arrow shareholders PetroChina and Shell committed to investment.

"The first phase will create 200-plus construction jobs, which will start almost immediately, as well as millions of dollars in business opportunities for local suppliers," he said.

"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."

Construction is expected to start later this year with first gas forecast to flow from 2021.

The project is underpinned by 16 petroleum leases cover around 2500 sq km on blocks between Dalby and Chinchilla.

Arrow has been negotiating binding land access compensation agreements with local landholders and involving them in its field development planning.

Arrow CEO Cecile Wake praised the Queensland Government's role.

"Arrow Energy - and its shareholders, PetroChina and Shell - have worked with the QGC joint venture to put in place a complex and innovative suite of commercial collaboration arrangements to bring to market one of this state's great natural resources - natural gas," Ms Wake said.

"During this, we have been most grateful for the assistance afforded by the Queensland Government.

"Now it is down to Arrow to safely and successfully deliver this project, which will bring extra gas to market domestically and internationally, and extra jobs regionally.

"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."

The Surat Gas Project will bring an extra 5000 petajoules of gas to market over 27 years - including about 270 terrajoules/day during phase one's peak production, towards a whole-of-project peak of 700TJ/day.

The majority of Arrow's Surat Basin gas is contracted to Shell-QGC, which sells gas for Australian users as well as for LNG for export.

The project is close to existing QGC infrastructure including processing facilities and pipelines to transport gas to domestic and export facilities.

Dr Lynham said a significant third-party infrastructure collaboration agreement between Arrow and Shell-QGC allowed the use of existing infrastructure, minimise project impacts on nearby communities and landholders and enable a faster path to market.

Queensland's most recent major gas project to start production has been Senex Energy's domestic-only Project Atlas near Wandoan and Miles.

Other recent major gas expansions are Shell-QGC's: the $500 million Project Goog-a-binge in late 2018, and the $1.7 billion Project Charlie in late 2017, which together created about 2000 jobs.

Almost 25,000 km2 of land has been made available in Queensland for gas exploration since early 2017, almost a third of it for the domestic market only.

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