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The Australian Energy Market Operator (AEMO) had previously warned that the state was heading for gas supply shortfalls if invest- ment in new production, storage and transmis- sion projects stalled.
AGIG CEO Ben Wilson said: “As renew- able energy penetration increases, gas demand will become more variable as gas fulfils a crucial firming role. This increases the need for storage.”
GB Energy CEO Tim Baldwin said: “The pro- ject will provide Victoria with new domestic gas supply in the short term. The overall investment in critical energy storage infrastructure will then
provide a range of ongoing benefits to an evolv- ingEastCoastmarket.”
The two companies are also working towards AGIG’s involvement in the estimated AUD145mn ($91.9mn) development of the Golden Beach’s upstream infrastructure. This covers all plant, property, equipment and activ- ities related to drilling and producing gas from Golden Beach.
Origin Energy has agreed to buy all of the field’s gas production and has also entered into a foundation storage contract with GB Energy. The field is located around 3km offshore in the Gippsland Basin.
Arrow Energy JV sanctions Surat gas project
PROJECTS & COMPANIES
THE Arrow Energy joint venture, compris- ing Royal Dutch Shell and PetroChina on a 50:50 basis, has sanctioned the first phase of the Surat gas project in Queensland, Australia. The green light for the project was given on April 17, the same day that both Shell and Pet- roChina announced a final investment deci- sion (FID) on the venture. The move comes as many other projects are being delayed as a result of global oversupply and the coronavi- rus (COVID-19) pandemic.
The Surat gas project will target coal-bed methane (CBM) resources – known locally in Australia as coal-seam gas (CSG) – to produce up to 90bn cubic feet (2.5bn cubic metres) per year. The gas will flow to Shell’s QGC project, which supplies both the domestic and interna- tional markets. The venture includes an 8.5mn tonne per year (t/y) LNG terminal on Curtis Island, near Gladstone, as well as gas production and processing facilities in the Surat Basin.
The Surat gas project is underpinned by a 27-year gas sales agreement that Arrow signed with Shell in 2017. Construction of the project is
set to begin this year on over 600 wells that will be part of the first phase, while first gas sales are expected in 2021.
“The utilisation of QGC’s existing upstream pipelines and treatment facilities enables Arrow to significantly reduce devel- opment costs, making the project competitive and economically attractive,” Shell’s director of integrated gas and new energies, Maarten Wetselaar, said in a statement. “The Arrow joint venture partners’ decision not to build another two trains on Curtis Island provided the opportunity to create this alternative path- way to market for the resource. The approach we have taken to this investment is aligned with Shell’s focus on actively managing all operational and financial levers to deliver sus- tainable cash flow generation. It reflects our disciplined approach to capital spend, which takes a long-term view of the fundamentals of supply and demand.”
The Surat gas project is anticipated to pro- duce around 5 trillion cubic feet (142 bcm) of gas over its lifetime.
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