PERTH (miningweekly.com) – Oil and gas major Santos and its joint venture partners in the Gladstone liquefied natural gas (GLNG) project, will invest more than A$400-million on the 137-well Arcadia gas project, in the Bowen basin.

Santos said on Thursday that the A$400-million Arcadia investment was in addition to the A$900-million being invested in the upstream developments in the Maranoa, Western Downs, Central Highlands and Banana regions of Queensland this year.

Santos MD and CEO Kevin Gallagher said that the Arcadia gas project would create up to 300 construction jobs and local business opportunities in the Central Highlands region, helping to sustain and boost the benefits of Santos’ and GLNG’s earlier investments.

“This initial phase of the Arcadia development will at its peak deliver in excess of 75 TJ/d to the gas supply for the GLNG project. This is great news for both the domestic gas market and our LNG exports.”

The decision to sanction the project follows a successful 13-well pilot programme, which tested changes to the planned well design and operating philosophy.

“We have reduced our connected well costs in Queensland by more than 70% since 2015 to become Australia’s lowest cost onshore operator,” Gallagher said.

"If you want to put downward pressure on gas prices, reducing the cost of supply is a good place to start. Santos will apply our low-cost operating model, and a well design and water management approach tailored for the Arcadia field, to extract more gas for less money,” he added.

The project will involve drilling 137 new wells and constructing a 140 km gas and water gathering network, two 4G communication towers, a new compression station, a 4 Mℓ/d water treatment plant, a 5 MW gas-fired power station, and associated roads and infrastructure.

Queensland Mines Minister Dr Anthony Lynham said the investment further fixed capital investment in the state’s A$70-billion LNG industry, and demonstrated ongoing confidence in Queensland as a resources investment destination.

“The construction jobs are particularly welcome, as will be the royalties that will flow to future Queensland Budgets to help fund doctors and nurses in hospitals and teachers in schools. This is also good news for landholders, who have to date benefited from more than A$387-million paid in compensation.”  

The Queensland Resources Council (QRC) has also welcomed the investment by Santos and its GLNG partners, with CEO Ian Macfarlane saying it was another example of the resource sector delivering jobs and responsibly unlocking gas.

“Part of the enduring benefit for Central Queensland of this project is two new 4G towers to improve reception and reliability for the whole community – another example of the opportunities the gas industry has created for regional Queensland,” Macfarlane said.

“Queensland is a leading example when it comes to government and industry working together for the benefit of all. I congratulate Santos and its GLNG partners along with the government on this significant investment into regional Queensland.