Little progress on Arrow’s LNG project

The likelihood of any work beginning on Arrow Energy’s proposed LNG project on Curtis Island is still up in the air, as those LNG projects currently under construction face continued scrutiny in light of falling oil prices.

The company entered into the front-end engineering design (FEED) phase for the project’s associated 500 km Arrow Bowen Pipeline in December, with plans to link central Queensland’s Bowen Basin to Curtis Island, with Worley Parsons awarded the contract.

The pipeline, which will be buried at a minimum depth of 750 mm in a 30 m easement, will transport CSG from Arrow Energy’s gas fields in the Bowen Basin to the proposed Arrow LNG Project planned for Curtis Island near Gladstone.

The Gladstone Observer has reported an Arrow spokesperson as commenting the company was “reframing development options to deliver better value for shareholders”.

“Collaboration discussions with third parties are continuing, to identify the best option for monetising Arrow’s gas reserves in both the Surat and Bowen basins,” the spokesperson said.

“This process is results and value-focused and not schedule-driven.”

Arrow, which is jointly owned by Shell and PetroChina, had initially planned to develop a CSG-to-LNG processing facility off the coast of Gladstone, alongside three other facilities currently under construction, though postponed its final investment decision for the project in February 2014, citing economic and inflation risk for its decision.

Meanwhile, GLNG Project partner Total fuelled speculation last year that Arrow is unlikely to process gas at its own facility with Total Exploration and Production Senior Vice President Asia Pacific, Jean-Marie Guillermou confirming that the joint venture is continuing discussions with third party suppliers including Arrow.

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