Surat Gas Project Phase 2 – Queensland
The Surat Gas Project Phase 2 is a major coal seam gas expansion located in the Surat Basin near Gladstone, Queensland. Operated by Arrow Energy—a 50:50 joint venture between Shell and PetroChina—the project involves the construction of up to 450 new production wells to significantly increase output from existing fields.
It is expected to supply around 130 million standard cubic feet of gas per day at peak production. With an investment exceeding A$500 million, construction is scheduled to commence in late 2024, with first gas deliveries anticipated by 2026.
The project has received both state and federal environmental approvals, with most regulatory hurdles cleared and infrastructure planning underway, including new pipelines and compression facilities.
While the Surat Phase 2 project is pitched as a vital contributor to domestic gas supply and LNG exports, environmental groups have raised concerns about its climate implications.
Coal seam gas extraction is known to involve methane leakage, and large-scale developments like Surat Phase 2 carry cumulative risks for groundwater depletion, land disturbance, and long-term emissions.
The gas will flow to the Shell-operated Queensland Curtis LNG (QCLNG) plant for export, linking it directly to international fossil fuel markets.
Critics argue that this undermines Australia’s emissions reduction efforts, and warn that expanding gas production at this scale contradicts climate science, which says new fossil fuel projects are incompatible with staying under 1.5°C of global warming.
Overview
- Owner/Operator: Operated by Arrow Energy, a 50:50 joint venture between Shell and PetroChina.
- Location: Onshore in the Surat Basin, near Gladstone, Queensland.
- Offshore Status: No – the project is entirely onshore and not connected to the Great Artesian Basin.
- Project Value: Investment of over A$500 million.
- Infrastructure: Phase 2 involves the expansion of existing coal seam gas fields, with the construction of up to 450 new production wells, a 121 terajoule/day compression station, 27 km of pipelines, and associated roads and infrastructure upgrades.
- Production Capacity: At peak, the project is expected to supply 130 million standard cubic feet of gas per day.
- Export vs. Domestic Use: The gas will be piped to the Shell-operated Queensland Curtis LNG (QCLNG) export facility on Curtis Island and also supplied to the domestic market.
- Project Timeline: Construction is scheduled to begin in late 2024, with first gas targeted for 2026.
Environmental and Social Concerns
- Environmental Concerns: This coal seam gas expansion raises concerns about groundwater depletion, land use conflicts, and long-term emissions associated with LNG exports.
- Community Opposition: Environmental groups have expressed strong opposition, warning of risks to local aquifers, farmland and ecosystems.
- Cumulative Impacts: The project adds to the already significant network of coal seam gas developments in Queensland, sparking debate about over-extraction and long-term land degradation.
Regulatory Approvals
- Status: The project has received the necessary state and federal environmental approvals and is moving toward construction.
Company Information
- Arrow Energy: A joint venture between Shell and PetroChina focused on coal seam gas development in Queensland.
- More Info →
The Surat Gas Project Phase 2 is a major expansion of Queensland’s coal seam gas industry—one that reignites concerns over water use, land access, and the role of fossil gas in a decarbonising world. While touted as a key supply boost for Australia’s LNG exports, its approval has drawn backlash from environmental defenders calling for a pivot to renewables and long-term aquifer protection.
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