An agreement has been reached on long-term infrastructure sharing arrangements between Australia Pacific LNG and the Shell-operated QCLNG project, with the former also agreeing to secure additional gas supplies.
Under the tolling agreements, the QCLNG project will be able to transport and process gas and water from the Arrow Energy Surat Basin fields using available capacity in existing Australia Pacific LNG-QCLNG joint infrastructure.
The infrastructure sharing arrangements will commence from 2020 and continue until 2035, with options to extend to the end of 2049.
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In addition, Australia Pacific LNG has taken the opportunity to secure up to 350 PJ of gas from the QCLNG project.
The agreement to buy gas from the QCLNG project at an oil-linked price over 10 years from 2024 hopes to diversify and strengthen Australia Pacific LNG’s gas portfolio.
These arrangements are subject to Arrow Energy taking certain final investment decisions in connection with the development of its Surat Basin fields.
Australia Pacific LNG is Queensland’s largest gas project, and one of the biggest gas suppliers to the domestic market. In 2018, the company supplied close to 30 per cent of total east coast gas demand.
Australia Pacific LNG CEO Warwick King says the company is pleased to work collaboratively with QCLNG, paving the way for the development of significant new gas supplies in Queensland.
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“Australia Pacific LNG has taken the opportunity to grow and diversify our gas portfolio, while the tolling agreements with QCLNG allows us to maximise value from our investment in existing infrastructure,” he says.
“These arrangements demonstrate the industry’s determination to develop more gas for the market, in the most efficient way possible so we can keep costs down.
“Working together and using existing infrastructure will not only enable lower cost development of new gas supplies, it will also minimise impacts on landholders and local communities by avoiding duplication of infrastructure.”