It is the first licence to be awarded for a gas pipeline between the Surat Basin and Gladstone.

The 470 km buried pipeline will extend northwest from Dalby to Chinchilla before travelling north to Gladstone.

The pipeline will initially deliver approximately 90 PJ/a of CSG to the Fisherman’s Landing plant to meet a proposed export contract for 1.5 MMt/a of LNG.

It is expected that construction of the pipeline will start in 2011, with first gas supplied to the plant in late 2012.

Article continues below…

Following the release of Arrow’s half yearly results, Chief Executive Officer Shaun Scott confirmed the company is considering acquiring new land as part of expansion plans for the project.

Mr Scott said that the company is in discussion with the Gladstone Ports Corporation regarding land adjacent to Arrow’s LNG development. Japan’s Sojitz Corporation has also proposed an LNG development on the block.

Commenting on the progress of the project, Mr Scott said “We’re looking at getting the first train off the blocks, then getting a move on for the second train.” He added that the capacity of the two initial 1.5 MMt/a trains could later be expanded, or more trains could be added to increase the capacity of the project as a whole.

Arrow has said that the CSG exploration and appraisal program to supply the project is 22 per cent complete.

The company’s planned program focuses on tenements in Queensland’s Bowen and Surat basins and New South Wales’ Clarence Moreton Basin, with 179 wells projected to be drilled in total.

Mr Scott also said that following Arrow’s takeover of LNG Ltd subsidiary Gladstone LNG, the new ownership structure facilitates bringing in new partners to the project. He said that Arrow is currently exploring the timing of any potential partnerships.

He further noted that a final investment decision on the project may be delayed.

Arrow is currently in discussion with Golar LNG and Toyota Tsusho to transition sales agreements the companies previously held with LNG Ltd.