Arrow Energy wins gas pipeline licence

MELBOURNE: Arrow Energy, owned by Royal Dutch Shell and PetroChina, has been granted a licence to build a natural gas pipeline in Australia’s Queensland state that could contribute to easing the country’s gas supply crunch.

Queensland issued the pipeline licence last Friday, a spokesman for the state’s Department of Natural Resources and Mines said on Monday.

The 420 km (260 mile) pipeline is designed to carry gas from a coal seam gas project in Queensland’s Bowen Basin to the Gladstone area.

There has been no final decision yet on the pipeline because the coal seam project has not been developed.

Arrow is working on overcoming challenges with coal seam gas production in the Bowen Basin and does not know what impact that will have on the overall project’s schedule, an Arrow spokeswoman said.

The Bowen project was originally going to supply a liquefied natural gas (LNG) export project, which would have been the fourth on Queensland’s east coast, but Shell and PetroChina shelved that plan more than two years ago.

Instead, Arrow’s gas could help ease a looming gas shortfall in Australia’s eastern market by supplying rival LNG projects, which have been blamed for taking gas out of the domestic market to help meet export contracts.

Higher gas demand from the three LNG plants in Queensland have stoked a rise in local gas and power prices and led energy market operator to warn of a gas shortfall within the next two years, alarming miners and manufacturers. — Reuters