SYDNEY – The Anglo-Dutch oil firm Royal Dutch Shell announced on Friday that two of its joint ventures have reached an agreement to explore large reserves of coal seam gas in eastern Australia.
Arrowy Energy (made up of Shell and PetroChina) and Queensland Curtis LNG (QCLNG, made up of Shell, CNOOC and Tokyo Gas) are the two parties in the deal.
The agreement, valid for 27 years and involving five trillion cubic feet of gas, states that Arrow Energy will supply gas from its reserves in Surat Basin, in the state of Queensland, to QCLNG’s plant on Curtis Island.
Shell Australia Chairman Zoe Yujnovich said in a statement that the agreement has set the stage for the scaled exploitation of Arrow Energy’s gas resources.
According to sources from the sector cited by Australia’s ABC channel, the deal will generate 1,000 jobs, increase gas supply in the nation, and start the exploitation of one of the largest gas reserves in the eastern coast of Australia.
In 2010, Shell and PetroChina together acquired Arrowy Energy with an eye on exploiting the seam gas reserves in eastern Australia.
However, the plan was put on hold and officially shelved around the beginning of 2015 due to the fall in gas prices and the increase in costs, ahead of its current resumption.