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Arrow Wins Approval for A$550 Million Queensland Gas Pipeline

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By James Paton

Feb. 19 (Bloomberg) — Arrow Energy Ltd., Royal Dutch Shell Plc’s coal-seam gas partner in Australia, won government approval to build a pipeline to the proposed Fisherman’s Landing liquefied natural gas plant in the state of Queensland.

Construction of the link, expected to cost about A$550 million ($493 million), will start next year, with the first gas supplied for processing in late 2012, Arrow said today in a statement to the Australian stock exchange. The pipeline will stretch northwest from Dalby in the Surat Basin to Chinchilla, before heading north to Gladstone on the central Queensland coast, Arrow said.

Brisbane-based Arrow Energy aims to become the first of five proposed Queensland coal-seam gas to LNG projects to make shipments to Asia. Arrow’s project may cost as much as A$2.2 billion to develop, it said earlier this month.

The Queensland government awarded Arrow a license to develop the 470-kilometer (292-mile) pipeline, the company said today. While Arrow seeks to be first, it may delay a decision to approve the LNG development until the middle of 2010 after acquiring 100 percent of the venture, analysts have said.

Arrow has dropped 12 percent this year in Sydney trading, compared with a 4 percent decline for the benchmark S&P/ASX 200 Index.

–Editors: John Viljoen, Gavin Evans.

To contact the reporter on this story: James Paton in Sydney +61-2-9777-8698 or [email protected].

To contact the editor responsible for this story: Amit Prakash at +65-6212-1167 or [email protected].

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