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Arrow Energy’s coalbed methane project receives approval

World Coal,

The state government of Queensland has given environmental approval to Arrow Energy’s Bowen Basin coalbed methane (CBM) project.

 The scope of the unconventional gas project has been reduced slightly since the environmental impact statement was submitted last year. The project will see the drilling of 4000 CBM wells, though this well figure is down from an original 6625.

Arrow Energy said it welcomed the state government’s approval for the project, and said it supported the company’s previous announcement that it was commencing front-end engineering and design work for the project.

Andrew Faulkner, CEO of Arro Energy, said both decisions were critical milestones in progressing the development of Arrow’s significant Bowen Basin gas reserves.

"We welcome the Queensland Government's approval of the EIS for the proposed Bowen development," he said. "Arrow's decision yesterday to proceed with FEED demonstrates the attractiveness of our Bowen Basin reserves."

The Bowen Basin CBM project involves developing Arrow's tenements near its existing gas fields with staged expansion of the 4000 gas wells and gas infrastructure in a 8000 km2 area about 150 km southwest of Mackay over a project lifetime of 40 years.

The project's environmental assessment has been progressing since Arrow applied for approval to voluntarily prepare an EIS in April 2012. The latest submission, a supplementary report to the EIS (SREIS), was submitted to government in June 2014. It addressed public comments and other EIS submissions, and provided further information from additional studies.

In regards to the potential environmental impact of the CBM project, the company said that it had “specifically committed to avoiding all disturbance within Homevale National Park. All project planning will be done in accordance with Arrow’s commitments, as well as any legislative obligations.”

Analysts have said the Bowen Basin would provide a second business for the company should it decide to sell its Surat Basin gas.

Faulkner said development options for the Surat Basin gas reserves were being progressed, and that collaboration discussions with third parties were continuing.

From predictions given so far, the CBM project’s contribution the local economy would peak at AU$ 600 million by 2021 – 2022 and plateau at a similar level once peak gas production is reached.

The Queensland state government should earn about AU$ 55.7 million/year in royalties and taxes, while the Federal Government should receive about AU$ 85.5 million/year.

Written by Sam Dodson

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