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Arrow Energy wins Australian pipeline license

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LNG Industry,

Reuters are reporting that Arrow Energy has been granted a license to build a natural gas pipeline in Australia's Queensland state that could contribute to easing the country's gas supply crunch.

Queensland issued the pipeline license on 28 April.

The 420 pipeline is designed to carry gas from a coal seam gas project in Queensland's Bowen Basin to the Gladstone area. There has been no final decision yet on the pipeline because the coal seam project has not been developed.

The Bowen project was originally going to supply an LNG export project, which would have been the fourth on Queensland's east coast, but Shell and PetroChina shelved that plan more than two years ago.

Instead, Arrow's gas could help ease a looming gas shortfall in Australia's eastern market by supplying rival LNG projects, which have been blamed for taking gas out of the domestic market to help meet export contracts.

Higher gas demand from the three LNG plants in Queensland have stoked a rise in local gas and power prices and led Australia's energy market operator to warn of a looming gas shortfall within the next two years, alarming miners and manufacturers.

To help avert a shortage, the government announced a radical plan to limit LNG exports from Queensland.

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