Shell to begin new gas project in Queensland

Shell Australia has announced the drilling of 161 new wells in Queensland as part of a new project aimed to boost gas supply in the east coast.

Named “Project Ruby”, the joint venture with Shell’s QGC business, adds on to QGC’s operations in the Surat Basin. The wells will be drilled this year and in 2018 within QGC’s existing tenements in the state’s south-west.

The project will secure 350 new and existing jobs in the region during its 16-month construction, which will be advertised in the Surat Basin.

Shell chairman Andrew Smith said the project showed the company’s commitment to continuing gas supply in the east coast market.

“This is the next significant milestone for the QGC project and a further vote of confidence in Queensland’s onshore gas industry,” he said.

“We are proud to be investing in regional Queensland, where state and local government have had the vision to establish the rules for a gas industry that creates jobs and supports farmers by providing water, building new roads and paying taxes.”

Smith added that the project highlights Queensland’s growing onshore gas industry and will drive down gas prices.

“Local gas production also means Queensland customers will pay less for gas than those in southern states,” he said.

“This is a competitive advantage for Queensland business in attracting manufacturing jobs from Victoria where gas customers will be forced to pay more for political reasons.”

Queensland premier Annastacia Palaszczuk welcomed the new project which will supply both domestic and liquefied natural gas (LNG) markets.

“Where other states have moratoriums on gas development, we have a rigorous policy that has promoted the sustainable development of the LNG industry,” she said.

Queensland Resources Council (QRC) CEO Ian Macfarlane said the project was good news both for the local community and for the state’s gas supply.

“This significant milestone for the QGC project is also a vote of confidence in Queensland’s onshore gas industry,” he said.

“Importantly, this is an investment into regional Queensland, where state and local governments and farmers support the gas industry, resulting in massive economic benefits for local and state governments as well as farmers and rural and regional communities.”

Shell’s QGC business will sell more than 75 petajoules of gas to Australian customers this year, which represents more than 10 per cent of east coast demand and 40 per cent of Queensland demand.

According to the QRC, Queensland’s gas supply contributed $12.8 billion in economic contribution and supported 65,000 jobs between 2015-16.