Arrow to award FEED contract for Surat Basin expansion

Image: Arrow Energy

Arrow Energy plans to double the production capacity of its Tipton gas project in Queensland amid an east-coast gas shortage.

The company will undertake the front-end engineering design (FEED) phase for a proposed expansion of its Surat Basin operation. 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.

It will also include new gathering lines, an upgraded water treatment facility and four new compressors.

“This project continues the development of the Arrow resource which will see more gas in the market,” said Arrow Energy chief executive Qian Mingyang.

“[It] 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 per cent.”

The project follows investment of more than $600 million by Arrow in its Surat Basin infrastructure, including $500 million towards its Daandine expansion project commissioned in late 2016 and more than $100 million to expand capacity at its Daandine and Tipton fields.

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

Shareholders will consider a final investment decision after the design phase and are expected to reach an agreement for the majority of Arrow’s Surat Basin gas reserves later this year.

Together, the expansion projects would bring Arrow’s Surat gas production to more than 170 TJ/d, for both domestic and export use.

“Arrow has a strong record of working with local companies, so this is good news for local businesses and another vote of confidence in Queensland’s onshore gas industry,” said Ian Macfarlane, chief executive of the Queensland Resources Council.

“We only hope that the other states follow Queensland’s lead and open up gas reserves to help fix the energy crisis households and businesses, especially manufacturers, along the eastern seaboard are facing.”