Shell invests in second phase of Surat Gas Project in Australia

The gas from the project will flow to the Shell-operated QCLNG liquefied natural gas (LNG) facility on Curtis Island, near Gladstone, to meet long-term contracts and supply domestic customers. This is part of an existing 27-year gas sales agreement between Arrow Energy and QGC. Phase 2 is expected to contribute around 22,400 barrels of oil equivalent per day (or 130 million standard cubic feet per day) at peak production.

“Embarking on Phase 2 of the Surat Gas Project with Arrow is part of our commitment to bring more gas to market,” said Zoë Yujnovich, Integrated Gas and Upstream Director at Shell. “QCLNG marked its 1000th cargo at the end of last year, reflecting its significance as a gas supplier for Australia and the region. This investment will enable us to sustain and grow this important, secure energy source that offers a lower emissions alternative to options like coal.”

During Capital Markets Day in 2023, Shell said it would secure further feedgas supply for its existing LNG facilities through additional backfill projects to increase value for shareholders. Phase 2 will deliver volumes to be processed through QCLNG infrastructure and comprise up to 450 production wells, a field compression station, 27 kilometres of new pipeline and road and infrastructure upgrades.

Zhengxin Peng, CEO of Arrow Energy, revealed that first gas is expected in 2026. He added in a press statement that, “At a time when more gas is needed for homes, businesses and industries, the SGP North development will solidify Arrow’s position as a major producer of natural gas on the east coast. Natural gas is an important part of the energy transition, and the expansion demonstrates the faith our shareholders have in our ability to manage and deliver large-scale projects.”