Arrow Energy enters FEED for Tipton gas project expansion in Surat Basin, Queensland

Queensland gas producer Arrow Energy, the joint venture between Shell and PetroChina, is set to enter the front-end engineering design (FEED) phase for a proposed major expansion of its Tipton gas project in the Surat Basin.

The expansion plan at Tipton follows after Arrow recently invested more than $600m in its Surat Basin infrastructure to expand capacity at its Daandine and Tipton fields.

Arrow Energy CEO Qian Mingyang said: “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.

Under the gas expansion project, the existing facilities will be upgraded and are expected to more than double production capacity from Tipton to more than 80 terajoules a day (TJ/d).

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

Mingyang added: “This project continues the development of the Arrow resource, which will see more gas in the market.”

With the latest upgrade initiative, the gas production capacity of Arrow’s Surat assets is expected to be more than 170TJ/d for both domestic and export use.

The Surat Basin infrastructure includes the $500m Daandine expansion project that was commissioned in 2016 and the commencement of a more than $100m Produce the Limit (PtL) project earlier this year.

Mingyang further noted: "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%.”

Once FEED is completed, the shareholders will consider a final investment decision.

Mingyang concluded: “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.