Shell, PetroChina Mull JV Expansion
Shell and PetroChina’s Australian gas joint venture, Arrow Energy, said May 8 it will undertake the front-end engineering design (Feed) phase for a proposed major expansion of its Tipton gas project 30km west of Dalby in Queensland’s coalbed methane (CBM) Surat Basin.
Shell already has a majority stake in the 8.5mn metric ton/yr capacity QCLNG export plant in Queensland, so increased CBM supply would give Arrow the flexibility to supply more gas either to the domestic market or for liquefaction/export, depending on export demand and local need. Gas producers in Australia face increased political pressure to step up supplies to the domestic market, in view of a likely shortage of local gas for use in power generation later this decade.
Arrow Energy CEO Qian Mingyang said the project involved a significant upgrade of existing facilities, and would more than double production capacity from Tipton to more than 80 terajoules per day (75.4mn ft3/d, or 0.78bn m3/yr): “This project continues the development of the Arrow resource which will see more gas in the market.” Arrow said this follows a recent A$600mn-plus investment by Arrow in its Surat Basin infrastructure.
The Tipton expansion Feed contract would be awarded within weeks, it added.
“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,” Qian said, noting that after Feed was complete, the two shareholders would consider a final investment decision. Together, the expansion projects (Daandine, PtL and Tipton) would take Arrow’s Surat gas production to more than 170 TJ/d (1.66bn m3/yr), for both domestic and export use.
Mark Smedley