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Shell and PetroChina move on Australia Arrow Bowen Gas Project

Arrow awarded Bowen coal bed methane project FEED

The international oil company (IOC) Royal Dutch Shell (Shell) and the national oil company China National Petroleum Corporation (CNPC or PetroChina) have decided to move on their Australian 50/50 joint venture Arrow Energy Penty Ltd (Arrow) Bowen Gas Project (BGP) to the next phase in making the decision to proceed with the front end engineering and design (FEED)

With the Bowen Gas Project, Shell and CNPC are willing to develop the coal bed methane of the Bowen Basin in the northeast of Australia.

Shell_Arrow_CSG_Bowen_Gas_Project_MapWell known for its coal production in Central Queensland, the Bowen Basin maintains 52 world-ranked mines of black coal.

Since 2004, the Bowen Basin holds one of the largest associated coal bed methane (CBM), or coal seam gas (CSG) field in production with the Moranbah Gas Project.

In the Bowen Basin, Arrow owns exploration licences covering 11,000 square kilometers.

Because of this experience accumulated in a decade from the Bowen Basin, Shell and PetroChina are keen to develop the blocks adjacent to Moranbah under the name of the Bowen Gas Project. 

In 2012, Arrow submitted its application for the Environment Impact Statement (EIS) to the Queensland State and the Australia Federal Government.

In September 2014, Arrow received the State formal approval clearing the way for Shell and PetroChina to move on the Bowen Gas Project FEED stage.

This Bowen Gas Project FEED contract should be completed in the next twelve months while Arrow finalizes all pending approvals.

Shell and CNPC to start Arrow BGP Phase-1 in 2015

In the meantime Shell and PetroChina will continue to evaluate the opportunity to develop their own liquefied natural gas (LNG) export terminal or to prefer selling their gas to one of the LNG plants in construction on the Curtis Island.

When Shell took over Arrow in August 2010, it decided to put on hold the Arrow LNG project in front of the costs and lead time uncertainty observed in Australia with all major projects.

Shell_Arrow_CSG_Bowen_Gas_ProjectFrom the Bowen Gas Project to the LNG plants located on the Curtis Island, the CSG will be transported through the Arrow operated Bowen Pipeline in project.

In the process selected by Shell and PetroChina, the gas will be pumped together with the water trapped together in the coal seams.

This mixture will then be separated and treated before export through the Bowen Gas Pipeline.

According to the terms of the contract, the FEED will also include the engineering and procurement for the early work on the Bowen Gas Project to be developed in phases.

Over the next 40 years, Shell and PetroChina are planning to deploy more than 4,000 gas wells covering approximately 8,000 square kilometers.

In the first phase, Shell and PetroChina have planned to install approximately 600 production wells between end 2015 and 2017.

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