Shell takes FID for Surat Gas Project in Queensland, Australia

Royal Dutch Shell has taken a final investment decision (FID) to develop the first phase of a A$10bn ($6.4bn) Surat Gas Project in Queensland, Australia.

The project is being developed by a Shell and PetroChina joint venture called Arrow Energy.

Construction works are slated to begin this year, while the first gas is expected to be delivered in 2021.

More than 600 wells will be built in Phase I, creating around 200 construction jobs.

At peak production, the first phase of the Surat Gas Project will deliver up to 90 billion cubic feet per year of new natural gas to Shell-operated QGC for domestic sales and exports.

Shell Australia Chairman Tony Nunan said: “QGC has reached strong and stable production since its start up in December 2015, and Arrow has the strong technical capability to develop the Surat Basin fields innovatively and efficiently.

“QGC supplied 16% of the demand in the Australian east coast domestic gas market in 2019 and celebrated its 500th LNG cargo. Gas from Arrow will provide more supply to both Australian domestic customers and export markets.”

The investment comes at a time when the Australian economy is struggling to offset the economic impact of Covid-19 pandemic.

Queensland Premier Annastacia Palaszczuk also welcomed the move, reported Reuters.

Arrow Energy CEO Cecile Wake said: “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.”