Surat Gas Project Overview

Arrow Energy has sanctioned the first phase of the Surat Gas Project.

The first phase of development, with construction from 2020, includes more than 600 wells which will bring around 300TJ/d of gas to market over 27 years.

The full 27-year  Surat Gas Project,  will include up to 2,500 new wells.

About 1,000 jobs will result across the life of the project, comprising some 800 construction roles and 200 ongoing operational roles. The first phase will see the creation of about 200 construction roles.

Phase one of the SGP will include more than 600 wells drilled from 2020, through an expansion north and south from Arrow’s current operational areas at Daandine and down to Tipton. Arrow will continue to expand to both the north and south of Daandine, down to Tipton.

This initial phase will see construction of inlet processing facilities (IPFs) at Shell-QGC operated David and Harry field compression stations. IPFs will enable Arrow to supply gas from its operational fields to Shell-QGC operated facilities, under a gas sales agreement. The David IPF will be the first delivery point online from late 2021.

Arrow will continue to use its existing compression facilities at Daandine and Tipton, with upgrades to the Tipton Central Gas Processing Facility.

Phase one also includes upgrades and connection to water treatment facilities. Arrow will connect to existing Shell-QGC operated water facilities at David, Broadwater and Glendower Ponds.

In addition to using Arrow’s existing water treatment facilities, which will be improved through upgrades to Arrow’s Tipton and Daandine water treatment plants, Arrow will send water to the Shell-QGC operated Kenya Water Treatment Facility. Two new brine storage ponds will be constructed at the facility to support water treatment for beneficial use.

A Beneficial Use Network will be constructed to return a portion of treated water to users with Condamine Alluvium allocations, to offset any potential impact from drawdown on the Condamine Alluvium and to maximise beneficial use of its treated CSG water. Additional treated water will be beneficially used via the existing SunWater Chinchilla scheme.

Please click here to read more about the Surat Gas Project, including subsequent phases.

Subsequent phases will include construction of two new field compression stations at Lynwood, south of Arrow’s Tipton development, and Girrahween, near Miles. Wells and gathering nearby these compression stations will be constructed to feed into the new infrastructure. Arrow also plans to step out into new development areas to construct wells and gathering south of Wandoan, and south and east of Cecil Plains.

Construction of two additional inlet processing facilities (IPFs) at Shell-QGC operated Jammat and McNulty field compression stations is also planned.

As with all CSG development, Arrow’s fields will continue to expand with development beyond these phases ongoing. Ultimately, gas will be commercialised across Arrow’s Surat tenure.

Peak construction is anticipated 2021 – 2025.

Arrow is committed to working with landholders to minimise impact on farmed land and agricultural operations.

Where feasible, we use deviated drilling which involves multiple deviated wells from one surface location resulting in a multi-well pad. This benefits landholders by reducing the overall footprint by up to 75 per cent compared to traditional vertical well field design.

Wherever possible, Arrow uses a standard right-of-way (RoW) that combines all pipelines and an access track to reduce impact, facilitate safe construction and assist with RoW rehabilitation.  By co-locating pipelines and access track, Arrow minimises the width of the RoW required and reduces disturbance to the Landholder.

Deviated drilling lets us reach the same amount of gas underground from a much smaller area on the surface – very important for reducing our impacts on high-production farmland.

Arrow has committed to multi-well pads and deviated wells on Intensively Farmed Land, where geology allows. Multi-well pads are preferred where the lowest coal targets are deeper than 400m. Surface spacing for deviated wells is up to 2.5km on average.

The deviated section of a well can extend at an angle of 70-82 degrees to horizontal distance of up to 800m from the well pad. This enables us to target a greater amount of coal without impacting the agricultural land directly above, while minimising our infrastructure footprint.

Outside of IFL areas, or where coals are shallower (less than 400m), Vertical wells are used with surface spacing from 800m to 1.5km (or greater).

Please click here to learn more about our innovative deviated drilling process.

Arrow does not currently use horizontal (in-seam) drilling techniques in the Surat Basin. It’s more viable in the Bowen Basin, which has coal seams that are up to 10 meters thick and more regionally continuous.

In the Surat Basin, the seams are much thinner and discontinuous, so our wells target multiple, smaller seams. Where geology allows, we use deviated wells from multi-wells pads in the Surat Basin, which allows us to cluster our wellheads in groups on single well pads to reduce our impact on farmland and farming operations.

By using deviated wells, we can reach the same area of coal seam from a single surface point that would otherwise require multiple vertical wells with their own well pads.

An infill well refers to a well that is drilled on a new well pad in close proximity to existing or planned well infrastructure. This approach is costly and not in Arrow’s best interest to include in its field development, and this is not being considered in Arrow’s future Surat development.

In the rare scenario where a well is not successful due to issues encountered during the drilling or operations, Arrow will plug and abandon it and re-drill a new hole close to the old one on the same well pad.

Beneficial Use Network

This is a pipeline system to return a portion of treated coal seam water to users with Condamine Alluvium water allocations, to offset any potential impact from drawdown on the Condamine Alluvium and to maximise beneficial use of treated CSG water.

Arrow has established a BUN (Beneficial Use Network) Committee as a sub-committee of the Arrow Surat Community Reference Group (ASCRG). It consists of people and groups that hold Condamine Alluvium water allocations. The committee’s purpose is to help us develop a scheme which meets our commitment to maximise beneficial use of coal seam water.

Click here for more information about the BUN Committee.

Participation in the BUN scheme will be open to Condamine Alluvium allocation holders from where the greatest drawdown is anticipated along the western edge of the alluvium. The network area is located west of Dalby, between the Daandine Water Treatment Facility in the north and the Tipton Water Treatment Facility in the south.

For more information about the Arrow Beneficial Use Network, including the proposed scheme area, please view this presentation.

Coexistence

To inform and co-develop innovation to minimise impact, Arrow established community reference groups. Members include stakeholders that provide robust feedback (irrigator groups, landholders, local and state governments). These groups have been operational since 2010 and co-created Arrow’s 12 Coexistence Commitments which identify how  Arrow can coexist on intensively farmed land in the Surat Basin.

Informed by feedback from these reference groups, in late 2012, Arrow introduced alternative well designs (pad drilling with up to eight wells per site), coupled with pit-less drilling methods, use of above ground water storage tanks, revisions to its detailed field layout (including increased well spacing from 800m to ~2km) and revised location of gas and water gathering infrastructure. Importantly, these measures have been designed and agreed with landholders to ensure their effectiveness on important agricultural operations. Arrow also amended its compensation framework to reflect the high value of IFL.

To further demonstrate coexistence in the Surat Basin, Arrow has designed and built fit-for-purpose drilling rigs, trialled and proven the viability of pit-less drilling, trialled and proved the viability of various artificial lift (down-hole pump) systems, and optimised gas well design.

Arrow has undertaken substantial modification of its development proposals and operating methodologies to physically demonstrate it can coexist with other land users – farming and agricultural interests in the Surat Basin.

In 2012 Arrow publicly nominated its Theten Farm as a ‘demonstration farm’ and commenced technical and non-technical research work by way of demonstrating coexistence, including deviated  drilling from multi-well pads. The existing Arrow IFL Committee became the forum to refine technical commitments in co-development with landholders, including members of agricultural NGOs.

Construction of wells and gathering network

Once landholders and Arrow agree on the location of infrastructure and the terms of conduct and compensation agreements, planning for construction can commence.

There are five major steps in construction of wells and associated gathering infrastructure:

  • Site survey and constructing or upgrading access tracks as required
  • Constructing well pads (a levelled area of ground where the well will be installed)
  • Drilling the wells
  • Installing wellpad infrastructure, including well head skid and generators or power connection
  • Well completion (installing downhole pumping apparatus)
  • Connecting the well to Arrows water and gas networks with underground collection pipes, referred to as the gathering system
  • Commissioning of the well.

Please see below for a more comprehensive description of the construction process.

Drilling and well construction

Site survey

Site survey involves a small team in a light vehicle surveying the wellpad location and other necessary infrastructure, such as access roads and pipeline routes. This may also require the establishment of access tracks to the site, if not already existing. This work can take between two and five days to complete.

Wellpad construction

After the survey is complete, the wellpad site will be cleared and levelled.  Where required, fauna spotters / handlers will inspect the site prior to clearing works commencing to rescue or relocate any birds or animals.

The pad area that is cleared and levelled at this stage will be much larger than the final size of the constructed wellpad. This is larger area is to accommodate the drilling and completions works and will be rehabilitated once the works are completed. Generally, an area of 100m x 100m is cleared for a single well pad while a multi-well pad that can accommodate up to eight wells can require an area of up to 100m x 200m. Depending on the size of the pad, construction can take up to eight days to complete.

Drilling

Drilling activities may occur on a 24-hour basis and can take up to seven days to complete. The process involves drill rig and both heavy and light vehicles delivering parts and personnel to site.

A drill rig will be mobilised to site and an initial surface hole is drilled to a planned depth.  A steel casing is inserted into the surface hole and cemented in place. The cement is pumped down through the steel casing, out the open end at the bottom of the hole and back up the outside of the casing to the top.  This process ensures the cement fills any gaps between the steel casing and the surrounding rock.

Deviated drilling tools are then used to drill on a designated path to reach the coal. Once the production hole has reached its final depth, a specifically tailored casing is installed. Expanding (swelling) packers are used around the outside of the casing to isolate the coal seams from other aquifers or rock formations, and cement is pumped around the outside of the production casing to ensure the isolation. Testing is then undertaken on all casings to ensure well integrity and the well is “suspended” (made inoperable to prevent gas production) until the well can be “completed” (made ready to operate) through the installation of a down-hole submersible pump, and commissioned (started up).

Please click here for more information about the deviated drilling process.

Completion and commissioning

At this stage, surface infrastructure is installed on the well pad. This includes:

  • A well head
  • A metering skid that is used to manage and measure gas flow
  • Gas-driven generator or reticulated power equipment for a submersible pump
  • A control cabinet and communications aerial to enable remote monitoring.

To complete a well, a completion / workover rig arrived at the wellpad with about nine workers.  Working on day shift only, the crew will take four to seven days to drill out the internal cementing tools and install an electric submersible pump into the well. The pumps reduce water pressure in the coal seam to allow the gas to flow.

The well sites are now ready to be connected to Arrow’s water and gas networks and commissioned for operation.

Site rehabilitation

Once the works are complete, the wellpad construction site will be reduced to the final operating size and the excess area will be rehabilitated. As a guide, a single-well pad may have a fenced area about 20m x 30m, while the multi-well pad size will vary depending on the number of wells and layout of the site.

The remaining disturbed area will then be rehabilitated in accordance with the landholder requirements contained within the CCA, and can be used by the landholder for regular agricultural purposes.

The rehabilitated area may be required from time-to-time for well maintenance activities.

Gas and water gathering pipeline construction

The first step in constructing pipelines is surveying and pegging the pipeline route and construction areas, known as a “right-of-way” (RoW). The route will be planned with the property owners, and will be designed to minimise impacts to the day-to-day use of the property and future land use.

Once the RoW is pegged, the area will be cleared, with vegetation and topsoil stockpiled separately, for use during rehabilitation after works are completed. Erosion and sediment controls are implemented and the spreading of gypsum on top of the exposed sub soil is undertaken. The pipeline route will be excavated by a trenching machine. The trench depth will depend on land use, however there will be a minimum of 750mm of cover over the pipe.

The gathering pipeline will then be laid out along the route, before being welded together to create a “string” and lowered into the trench and backfilled. At this stage, above-ground safety infrastructure, such as high point vents and low point drains, is installed as required.

After backfilling and compaction of the trench, the RoW is rehabilitated. This includes grading the ground and reinstating original formations and natural contours. The grading/profiling is followed by evenly spreading the preserved topsoil across the RoW using a grader.

The buried pipeline will be pressure tested to ensure strength and to test for leaks. To ensure community and worker safety, an exclusion zone is enforced for hydraulic pressure tests and may require the temporary closures of local roads.

The final step is to seed vegetation on the RoW. A decision to reseed will be done in consultation with the landholder

Please view this fact sheet for more information about the construction process for wells and our gathering system.

Well pad stabilisation and footprint reduction usually occurs within 3-6 months after all wells have been commissioned at a location.

At the end of activities, all above-ground infrastructure will be removed and the wells will be decommissioned. Landholders on intensively farmed land can commence cropping immediately after the above-ground infrastructure is removed.

Pipeline installation commences with grading the top-soil layer which is collected on the far side of the right-of way (RoW) where it is separated and preserved until reinstatement. To ensure a stable landform, pipeline trenches are backfilled and compacted to the requirements of Australian Standard AS/NZS 2566 Buried Flexible Pipelines Part 1: Structural Design.  Compaction and testing of embedment / backfill in trenches is completed to Australian Standard AS/NZS 2566 Buried Flexible Pipelines Part 2: Installation.

As the pipeline cover settles, some minor, localised subsidence may occur. Generally, if it occurs, subsidence tends to happen in the first 12 to 18 months after a pipeline is laid, as the soil cover settles with weather conditions.

Landholders should contact Arrow, which will initiate rectifications works. These works will be undertaken within an agreed time frame and depend on the depth of subsidence and farming operations.

Further information about subsidence is available here.

The Australian Pipelines and Gas Association (APGA) Code of Practice for Upstream CSG Gathering Networks recommends pipeline marker posts be installed at 500m intervals in rural locations and at each property boundary. However, Arrow recognises this is not always practical.  For the cultivated paddocks on the subject property Arrow proposes to install marker posts at the boundaries of paddocks only.

Arrow are working with the Queensland Department of Transport and Main Roads (DTMR) and the Western Downs Regional Council (WDRC) to develop an agreement to manage and mitigate our impact on roads across the region.

This process includes undertaking joint road inspections, ongoing monitoring of road conditions and prioritisation of maintenance and repairs where necessary.

We are committed to ensuring roads that are used by our staff and contractors are maintained to a level that ensures the safety of all road users. Ultimately, all decisions to undertake upgrade or maintenance works are at the discretion of the relevant road authority.

Landholder engagement

Arrow has developed an Area Wide Planning program, which is a unique approach to landholder engagement.

It involves Arrow working with landholders to understand how they use their properties, and then jointly identifying locations for infrastructure to better suit current and future agricultural activities.

At the beginning of Area Wide Planning, we seek to engage with all landholders (and neighbouring landholders) within an area through a shed meeting, to share information on Arrow’s plans including a conceptual design. In some instances, landholders may prefer not to hold a shed meeting, in which case landholders proceed onto the next stage of the program.  Landholder feedback during these early engagements assist with refining the placement of infrastructure.

Arrow will then commence discussions with individual landholder where infrastructure is proposed.  Detailed discussion with landholders will inform infrastructure locations which will be confirmed following a field survey (a step landholders are encouraged to attend).

The last stage occurs when Arrow finalises its layout based on all available constraints being identified.  Negotiations will then be conducted one-on-one between Arrow and the landholder to finalise Conduct and Compensation Agreement arrangements.

Arrow will engage all landholders (owners and occupiers) who are directly affected by surface infrastructure or underground gathering pipelines through a conduct and compensation agreement (CCA). The level of compensation will vary depending on the direct impact to the property and its residents.

Arrow’s compensation is determined based on the existing land value and the level of land use disturbance and the framework will also cover reasonable professional fees and landholder management time, in accordance with legislative requirements.

Conduct and compensation agreements (CCAs) are not provided to landholders where wells deviate under their property (i.e. where there is no surface infrastructure, gathering lines or other surface infrastructure on the property) as there are no compensatable impact.

Potential impacts to water bores are covered under separate agreements including make-good arrangements. Click here for more information about the make-good agreement process.

Arrow will make every effort to reduce impacts to residents near our works. This includes orienting our worksite lighting to reduce light spill, reducing noise impacts through considered well placement and noise attenuation and managing traffic impacts through a combination of route planning, road maintenance and upgrades in collaboration with local council and the Department of Transport and Main Roads.

In cases where modelling indicates that local residents may experience short-term exceedances to noise limits set within our environmental approvals, Arrow may seek an ‘alternative arrangement’ with the occupants. Depending on the scenario, an alternative arrangement is a monetary contribution to the occupant to assist with (but not limited to):

  • nuisance abatement measures at the sensitive receptor (residence), such as double-glazed windows
  • to provide alternative accommodation for the duration of the activity causing the noise impact.

Alternate arrangements can apply to residents on properties where the activity is being undertaken, as well as neighbouring properties, where our activities are likely to exceed the limits within environmental approvals.

Arrow will pay professional costs in accordance with s.91 of the Mineral and Energy Resources (Common Provisions) Act 2014. Arrows compensation framework covers reasonable professional fees (solicitor, accountant, agronomist and land valuer) and the landholder’s management time (time spent engaging with Arrow).

Health, safety and environment

Arrow does not use hydraulic fracturing within the Surat Gas Project area. It is not required due to the geology of the area.

Arrow uses a system called Well Integrity Management System (WIMS) to ensure wells are properly maintained.

The WIMS is used to monitor and maintain equipment. Arrow does this through monitoring of gas line flow pressure through real time monitoring in the Arrow Control Room, through on-site wellhead gas inspections, and five-yearly ‘wall thickness’ tests to ensure there is no erosion or corrosion of surface equipment.

The frequency of maintenance will vary well by well, but has averaged once every two to three years.

Where there are up to eight wells on a multi-well pad, the frequency will be higher than for vertical well pads, with two to eight maintenance events per year, on average. For a four well pad, Arrow expects 1-4 maintenance events per year.

Arrow also requires access to the well pad for routine inspections and maintenance, which could range from weekly to quarterly, depending on the individual well. Typically for these wells, Arrow expects fortnightly inspections for maintenance and safety checks.

Arrow develops noise and vibration management plans as required by relevant environmental authorities.  These plans, combined with verified modelling, help to ensure that Arrow does not impact on local residents or sensitive receptors (homes) during construction or operation of its facilities.  Likewise, the potential for odour, dust and light impacts from Arrow’s activities have been modelled and mitigations constraints adopted, where required, to reduce potential impact and to comply with legislation.

We also undertake monitoring to verify that the models are accurate.

In instances where modelling indicated a potential short-term exceedance, Arrow will develop an appropriate ‘alternative arrangement’ agreement with impacted landholders. Click here for more information about this agreement process.

Arrow’s Construction Environmental Management Plan (CEMP) includes procedures to prevent fauna being harmed during construction or entrapped in pipeline trenches. These procedures include barricading identified sensitive areas, daily site and trench inspections by fauna spotters/handlers, and rescues and relocations as required. We also develop and implement specific species management plans as required under our environmental authority (EA).

Arrow is committed to fulfilling all its rehabilitation obligations in accordance with our EAs. Arrow’s financial assurance obligations are calculated on a tenure and project wide basis.

The financial assurance obligation assessed for Arrow is a security deposit held by the administering authority to ensure we comply with the obligations of our EAs and future rehabilitation costs.

A financial assurance is an amount of money equal to the expense that would be incurred if the Queensland Government had to rehabilitate a project area. This is a legislative requirement under section 297 of the Environmental Protection Act 1994 and a specific condition to all the environmental authorities (EA) that apply to Arrow.

Arrow has an integrated weed management plan that includes weed identification, weed control, vehicle and machinery hygiene and post-construction monitoring. We undertake ecological surveys prior to starting works on site and prepare a weed management risk assessment. Site specific access-conditions are developed to reduce the risk of weed spreads and clearly outline the weed risk status.

Arrow is happy to consider relevant site-specific information provided from landholders i, including the landholder’s own biosecurity management plan.

Any relevant site-specific information is provided to all staff and contractors entering the site. Appropriate training is provided to all staff and contractors.

Flaring

Flares are installed at the existing Daandine Central Gas Processing Facility (CGPF) and will be installed at the Tipton (CGPF) Inlet Processing Facilities at the Shell-QGC operated field compression stations.

The frequency and duration of flaring is dictated by both scheduled and unscheduled events, such as necessary maintenance and excess pressure conditions. Larger releases typically take place at a CGPF once every year for approximately two to three days during scheduled maintenance. Smaller releases may take place every one to two months for less than two hours at a time.

To minimise noise and visual impacts to our neighbours, Arrow will construct horizontal flares at the inlet processing facilities.

Nearby landholders will be notified before planned flaring. Advanced notification may not be possible for unplanned flaring.

Click here to find out more about flaring.

Subsidence

Arrow is committed to meeting its legislative and coexistence requirements, which includes addressing any potential future impacts caused by area-wide subsidence on Arrow tenure, as a result of Arrow’s CSG production.

Subsidence can be assessed by considering the mechanical properties of each component within the geological profile together with predictions of water pressure changes, to predict compression of each stratigraphic component. Arrow is bound by its environmental approvals to prevent or address subsidence-related impact caused as a result of its operations.

Environmental authorities provide conditions to ensure that Arrow rectify any localised subsidence associated with our construction activities on our tenure (e.g. pipeline installation, well pads, etc.).  Arrow has assurance systems in place to identify and rectify minor localised subsidence through the construction process and afterwards through on-site checks.

Regional subsidence arising from CSG-related groundwater extraction is managed through other legislative mechanisms such as the Commonwealth Environment Protection and Biodiversity Conservation Act, in order to ensure any potentially affected areas outside of our tenure (that are not covered by EAs), are protected.

Arrow’s primary tool for monitoring potential subsidence is satellite-borne interferometric synthetic aperture radar technology (InSAR). InSAR can be used to interpret changes in relative position, and indicate subsidence for different regions within areas potentially affected by CSG drawdown. The InSAR data provides a baseline from which future data can be assessed to determine changes in vertical ground elevation, and provides a snapshot of current vertical ground movement.  InSAR methodology can identify ground movement in excess of 8mm per year.

In addition to the InSAR monitoring, permanent ground movement monitoring stations are proposed to be installed at four locations within Arrow’s Surat Gas Project tenure to ground truth-the results of satellite monitoring.

Arrow also uses LiDAR technology, extensometer monitoring stations, on-ground survey and aerial photography to investigate specific instances of potential subsidence.

Arrow is seeking ground movement data from agriculture-related entities to better understand the dynamics of non-CSG related ground movement across cropping land. This will also be used to inform and update Arrow’s modelling and monitoring.

Click here for more information.

Jobs and contracting

About 1,000 jobs will be created across the life of the SGP, comprising more than 800 construction roles and 200 ongoing operational roles. The first phase will see about 200 construction roles, which will be generated by the contracting companies appointed by Arrow to deliver discrete parcels of works.

For Arrow’s initial construction in the Daandine to Tipton area, Arrow proposes to house any non-local construction workers in existing camp accommodation facilities in Dalby. If additional beds are required, Arrow may look at additional existing accommodation facilities in regional towns.

For construction of larger compression facilities, additional temporary accommodation near the construction sites may be constructed to minimise vehicle travel, impacts to roads and support safe driving conditions for its workforce.

Ultimately, Arrow intends to maximise the use of existing accommodation facilities as much as possible, however the safety of our employees and the local community will be the determining factor in any decision around accommodation.

All procurement and supply opportunities will be advertised on the Industry Capability Network (ICN) Gateway. Please visit the Arrow Suppliers Portal by clicking here to view current work packages listings or register your interest in future contracting opportunities .