Arrow enters FEED for Surat expansion

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Arrow Energy has announced that it will undertake the front-end engineering design (FEED) phase for a proposed major expansion of its Tipton gas project 30km west of Dalby in Queensland’s Surat Basin.

Arrow Energy CEO Qian Mingyang said the project involved a significant upgrade of existing facilities, and would more than double production capacity from Tipton to more than 80 TJ/d.

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

The project followed a recent $600 million investment by Arrow in its Surat Basin infrastructure, comprising the $500 million Daandine expansion project (commissioned in late 2016) and commencement of a $100 million Produce the Limit (PtL) project earlier this year, 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.

“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 – along with new gathering lines, an upgraded water treatment facility and four new compressors,” Mingyang said.

“The PtL project 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.”

Together, the expansion projects (Daandine, PtL and Tipton) would bring Arrow’s Surat gas production to more than 170 TJ/d, for both domestic and export use. They represent a strong commitment by Arrow to the development of its Surat Basin reserves despite challenging economic conditions.

Mr Qian said that after FEED was complete, Shareholders would consider a Final Investment Decision.
He said that in addition to these expansion activities, collaboration with industry proponents would be important in bringing Arrow’s sizeable gas reserves into the east coast gas market.

“I am expecting that we will reach agreement on a path to market for the majority of Arrow’s Surat Basin gas reserves later this year.” APPEA welcomed Arrow’s proposed expansion, which the peak body said could result in more gas getting to market.

APPEA Queensland Director Rhys Turner said that Arrow’s announcement once again showed that Queensland-based operators continue to do the heavy lifting in getting more gas to market.

“Arrow’s planned expansion of its Tipton operations may involve up to 90 wells in the initial phase and up to another 180 wells over the next 25 years,” Mr Turner said.

“This initiative – coupled with the recent announcement by QGC, a Shell joint venture, that it will soon start drilling up to 161 additional wells as part of Project Ruby – shows the industry in Queensland is getting on with the job.

Mr Turner said that all parties know that the only way to meet gas demands for exports, domestic manufacturing, and energy generation in a sustainable manner is to increase supply, which is exactly what Queensland operators are going.

 “Disappointingly, governments in the south-eastern states continue to have their heads in the sand when it comes to looking at new ways to increase the country’s gas supply.  They still prevent local projects yet expect the industry to supply their markets,” Mr Turner said.

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