Commercialising Arrow's mammoth CSG reserves

In late 2015, production challenges led to Arrow Energy’s decision to delay its upstream Bowen Basin development. Now, all eyes are on what the company will do with its massive CSG reserves in Queensland as it reduces its operational footprint in Australia.

A 50/50 joint venture partnership between Royal Dutch Shell and PetroChina, Arrow produces CSG from fields in the Surat Basin in southern Queensland and the Bowen Basin in central Queensland.

With about 1,200 CSG wells, the company supplies the Townsville, Daandine, Braemar, Braemar 2 and Moranbah power stations, as well as industrial users in Townsville and Moranbah, while its exploration tenements cover approximately 21,000 sq km across Queensland.

The company has previously proposed developing a 400 km high-pressure steel pipeline to bring CSG from the Bowen Basin to a gas hub 22 km northwest of Gladstone.

However, the company’s assets in the Bowen Basin, which contain deeper and tighter coals than the company’s holdings in the Surat Basin, have presented a number of production challenges, resulting in the decision to delay its development plans in the region.

“Horizontal wells are needed to achieve the required production rates, and the recent wells are not performing as expected at this time,” an Arrow Energy spokesperson told Gas Today.

“Additional work is required to underpin value in Arrow’s investment proposal to shareholders on the Bowen Gas Project and the Arrow Bowen Pipeline.

“Until it is completed, the impacts on project schedules are unknown.”

The Arrow Bowen Pipeline moved into the front-end engineering design (FEED) phase in December 2014, with engineering services firm WorleyParsons awarded the FEED contract.

Meanwhile, Arrow is undertaking additional work to underpin an economicallysound investment proposal to shareholders on both the Bowen Gas Project and the Arrow Bowen Pipeline, with development options for Arrow’s Surat Basin gas reserves also being progressed.

Watch this space.

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