In a significant boost to Australia’s energy sector, Shell and PetroChina have announced plans to expand their Surat coal seam gas project (SGP) in Queensland. The decision, revealed by Shell on Monday, comes amid growing calls for increased investment to enhance the local energy supply. The expansion reflects mounting pressure on industry executives and the government to address investment delays caused by recent state interventions aimed at controlling energy prices and securing domestic supply.
Australia’s energy market operator and competition watchdog have underscored the need for greater investment to alleviate the current market strains. The expansion, known as the second phase of the Surat project, is set to add more than 130 terajoules of gas per day, according to Arrow Energy, the joint venture between Shell and PetroChina responsible for the project. The first phase, which began production in 2020, has already established a solid foundation for this new development.
While Shell has not disclosed the financial details of the second phase, the company anticipates that it will yield approximately 22,400 barrels of oil equivalent per day at its peak. The project is expected to begin producing gas by 2026.
Arrow Energy CEO Zhengxin Peng emphasised the importance of the expansion, stating, “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.” The east coast of Australia is currently facing a supply shortage and rising gas prices, highlighting the significance of this development.
With large reserves of undeveloped gas, Arrow Energy’s expansion is poised to play a crucial role in addressing the regional energy crisis and stabilising the market in the coming years.