Arrow Energy set to make bold expansion with Surat Gas Project Phase 2

Arrow Energy, a joint venture between Shell and PetroChina, is poised to significantly boost its production capabilities with the initiation of Phase 2 of the Surat Gas Project (SGP) in Queensland, Australia. Known as SGP North, this phase marks a major scale-up in operations, promising to add over 130 terajoules of gas per day to the market, addressing both long-term contracts and domestic needs.

Surat Gas Project Phase 2 Expansion Details

Located in the northeastern area of Miles within the Western Downs region of the Surat Basin, the Surat Gas Project Phase 2 is set to commence later this year. This strategic development is designed to optimize the extensive gas reserves of the basin, which are expected to yield more than 4000 petajoules of gas over the project’s lifespan. Surat Gas Project Phase 2 will include the construction of up to 450 new production wells, a 121 terajoule per day field compression station, and 27 kilometres of new pipeline, enhancing the existing infrastructure to meet the rising energy demands efficiently​.

Arrow Energy advances Surat Gas Project Phase 2 to boost Australia’s gas supply

Integration with QCLNG and Long-term Impact

The gas produced from the Surat Gas Project Phase 2 will be channeled to the Shell-operated QCLNG facility on Curtis Island near Gladstone, integral to fulfilling a 27-year gas sales agreement with QGC. This facility is a critical component in Shell’s broader strategy to amplify its LNG business by 20-30% by 2030, relative to 2022 levels​. The Surat Gas Project Phase 2 not only aims to cater to the immediate energy needs but also solidifies Arrow Energy’s role as a pivotal player in Australia’s energy sector, supporting the country’s transition to more sustainable energy sources.

Economic and Community Benefits

The Surat Gas Project Phase 2 is anticipated to generate substantial local employment, with up to 400 new jobs expected to arise from the development. These positions will span across various phases of the project, providing a significant boost to local economies and opportunities for local contractors, including Indigenous businesses. The initiative also commits to minimizing environmental impacts and enhancing local infrastructure, echoing the responsible development practices set out in the first phase of the project​.

Expert Insights

Experts highlight that the successful implementation of Surat Gas Project Phase 2 could serve as a blueprint for similar large-scale energy projects worldwide, demonstrating the feasibility of balancing substantial energy production with community and environmental stewardship. The strategic use of existing infrastructure and the phased development approach are particularly noted for their efficiency and reduced environmental footprint.