Arrow Energy: Straight shooter

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 06 Jun 2017   Posted by admin


All images: Arrow Energy.

 

BY ELIZABETH FABRI

 

AS reports of a looming east coast gas shortage intensify, news from Arrow Energy has given the Queensland gas industry some hope; an expansion of Tipton gas field is on the horizon, and State Government approvals have been received to build a natural gas pipeline in the Bowen Basin.

 

Producing 20 per cent of Queensland’s gas use – enough to power 800,000 homes– Arrow Energy is one of Australia’s leading gas suppliers.

Developing gas since 2000, the company was acquired by joint venture partners Shell and PetroChina in 2010 for $3.5 billion, and now owns and operates five gas fields in the Surat and Bowen Basins, along with the 450MW Braemar 2 gas fired power station and off-take rights at the Daandine and Townsville power stations.

The company currently feeds most of its gas through the Townsville, Daandine and Braemar 2 power stations and off takes the electricity for sale into the grid.

The Moranbah Gas Project was one of the largest gas fields in Australia and supplied gas to the Moranbah Power Station.

While Arrow Energy was working towards meeting growing demand for cleaner burning fuels through its existing coal seam gas (CSG) projects, the company also had a number of pending developments across its 18,000sqkm of exploration tenements, including the east coast’s largest undeveloped gas resource.

The company previously planned to build a $22 billion LNG plant on Curtin Island, which was brought to a halt in January 2015, when Royal Dutch Shell declared the plant “off the table”; however gas projects in the Surat and Bowen Basin were still on the cards awaiting final approval from Arrow to move forward.

 

Surat Basin

Arrow Energy’s Surat Basin operations comprises four domestic gas fields; Tipton West, Kohan North, Daandine and Stratheden, and the undeveloped Surat Gas Project between Wandoan and Millmerran in southwest Queensland.

When developed, the Surat Gas Project would significantly bolster Arrow’s CSG portfolio, providing gas for both domestic and overseas markets.

In December 2013, the project received Federal Government approval, which allowed it to progress with exploration, development and production, including 6500 wells.

The development plan was complemented by a proposed pipeline that would transport gas from the Surat Basin to a gas hub 22km west of Gladstone.

However, for now Arrow would focus on improvements to its existing operations.

In the last 12 months, Arrow has invested $600 million in its Surat Basin infrastructure, including a $500 million Daandine expansion project that was commissioned in late 2016, followed by a $100 million Produce the Limit (PtL) project earlier this year to expand capacity at the Daandine and Tipton fields.

In May this year, the good news continued when Arrow entered the front-end engineering design (FEED) phase for a proposed major expansion of the Tipton gas project.

The existing project was located 30km south of Dalby and had been producing gas since September 2006, which it supplied to the Braemar 1 and Braemar 2 power stations.

Arrow Energy chief executive Qian Mingyang said the Tipton project would involve significant upgrades to its facilities, and double production capacity to more than 80 TJ/d.

 

“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,” Mr Qian 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.

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

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

A FEED contract would be awarded soon, and once completed shareholders would consider a final investment decision.

“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,” he said.

Queensland Resources Council chief executive Ian Macfarlane welcomed the news, stating Arrow’s plans would deliver timely gas amid the looming east coast shortage.

“The QRC congratulates Arrow on this exciting development which again demonstrates that Queensland is leading the way when it comes to working to address the problem of the east coast gas shortage,” Mr Macfarlane said.

“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.

“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.”

 

Bowen Basin

Arrow Energy’s proposed Bowen Gas Project was another prospective development waiting to be brought online.

The project involved a phased expansion of the company’s CSG production in the Bowen Basin, and once developed would be positioned near the existing Moranbah Gas Project, running north of Moranbah to Glenden.

The project received State Government approval on 8 September 2014, which was followed by Federal approval in October the same year.

Arrow was yet to give the project the green-light to begin, but in late April the project plan resurfaced when it was revealed Arrow had been granted a Petroleum Pipeline License to build the Bowen Basin project’s accompanying natural gas pipeline.

The proposed 420km buried high pressure steel gas pipeline would transport coal seam gas from the Bowen Basin to a gas hub north west of Gladstone.

The pipeline received Federal approval back in October 2014, and completed FEED in early 2016.

While the recent PPL approval was a step forward for Arrow, the plan would be on hold until the Bowen Gas Project was developed.

A proud supporter of the project, State Energy minister Anthony Lynham said the pipeline was a “missing link” in the gas supply network.

“We are encouraging that pipeline, we want that pipeline to be hooked up because it’s an important­ piece of infrastructure that’s been missing,” Dr Lynham told The Australian.

 

Community engagement

On top of Arrow Energy’s commitment to the east coast gas market, the company strived to work with the local Queensland communities.

The company was the foundation partner of Heart of Australia – the country’s first cardiac and respiratory service – and the official energy partner of the Brisbane Broncos.

Arrow provided a direct connection between the Broncos and Queensland regional towns, including Dalby and Moranbah.

In January, Arrow hosted the Bronco’s tour across 12 regional Queensland schools, and a regional fan day in November 2016.

Arrow Energy vice president external relations Leisa Elder said this was the fourth time Arrow had organised the free regional event for the community to meet their team.

“As part of our Broncos partnership it’s great we can bring the team to Dalby to meet some of their biggest fans,” Ms Elder said.

“This annual event has grown to become a highly-anticipated day on the local calendar and we look forward to this year’s event being even bigger and better.”

Arrow also ran a Brighter Futures program that provided community funding grants, sponsorships, and partnership investments to support community initiatives.

The first round of 2017 grants closed in March, with a second round open until September.