Shell greenlights $6.4 B Australia natural gas project

Royal Dutch Shell said it had taken a final investment decision to develop the first phase of Australia’s biggest coal seam gas resource in Queensland state.

The project is being developed by a Shell and PetroChina joint venture called Arrow Energy. Construction will start this year and its first gas sales are expected in 2021.

Shell did not provide a headline figure for the investment, though Queensland state Premier Annastacia Palaszczuk pegged the project at A$10 billion ($6.4 billion) in a joint press conference with Arrow CEO Cecile Wake.

The investment is a timely injection of cash for Australia’s A$2 trillion economy now on the verge of its first recession in three decades as businesses shut to fight the new coronavirus, throwing tens of thousands out of work.

Authorities are also eager to see the Surat project start up as Australia’s southeastern states face gas shortages by the mid-2020s.

Palaszczuk welcomed the decision, saying the biggest gas project the state has seen since 2011 would be a shot in the arm for its economy.

“The first phase will mean 200 jobs and we should see people out in the field around August, September this year,” said Palaszczuk, who is facing an election within months.

(This story corrects paragraph 2 to remove A$10 bln as Shell did not mention the number, and adds paragraph 4 to show attribution for it)

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