Shell and PetroChina have announced plans to expand the Surat coal seam gas project (SGP) in Queensland, Australia. This decision comes amid increasing calls for investment to enhance local energy supply, as industry executives urge government action to revive investments hindered by various state interventions aimed at curbing energy prices.
The second phase of the Surat project is expected to add over 130 terajoules of additional gas per day. Arrow Energy, the joint venture between Shell and PetroChina, will oversee this phase. The first phase of the project commenced production in 2020.
While Shell has not provided a cost estimate for the second phase, it anticipates that peak production will contribute around 22,400 barrels of oil equivalent per day, with first gas expected to flow in 2026. Arrow CEO Zhengxin Peng emphasized the importance of this development in meeting the rising gas demand for homes, businesses, and industries, solidifying Arrow’s role as a major natural gas producer on the east coast of Australia.
Arrow holds significant reserves of undeveloped gas in the region, which is currently experiencing a supply crunch and rising prices.