SYDNEY (Reuters) – Royal Dutch Shell said on Friday it had made a final investment decision to develop the first phase of Australia’s largest coal seam gas source in the state of Queensland.
FILE PHOTOS: Shell logo seen reflected in car side mirror at a gas station in west London, England, January 29, 2015. REUTERS / Toby Melville / Photo File
The first phase of the Surat Gas Project will bring as much as 90 billion cubic feet of new natural gas annually to the market at peak production, Shell said in a statement.
This project is being developed by a joint venture of Shell and PetroChina called Arrow Energy. Construction will begin this year and the first gas sales are expected in 2021.
Shell did not provide the main figures for the investment, although Prime Minister Annastacia Palaszczuk in Queensland pegged the project at a value of A $ 10 billion ($ 6.4 billion) at a joint press conference with CEO Arrow Cecile Wake.
This investment is a timely injection of cash into Australia’s $ 2 trillion Australian economy which is now on the verge of a first recession in three decades when businesses close to fight the new corona virus, leaving tens of thousands of jobs.
The authorities also want to see the Surat project begin when the southeastern states of Australia face a gas shortage in the mid-2020s.
Palaszczuk welcomed the decision, saying the largest gas project the country has seen since 2011 will be an opportunity for its economy.
“The first phase will mean 200 jobs and we have to see people in the field around August, September this year,” said Palaszczuk, who faces elections in a few months.
Queensland, which is also home to the controversial proposed Adani coal project, is highly dependent on revenues from the mining and energy sector.
(This story corrects paragraph 2 to remove A $ 10 billion because Shell did not specify the number, and added paragraph 4 to show attribution for it)
Reporting by Swati Pandey and Wayne Cole; Editing by Christian Schmollinger and Edwina Gibbs
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