Shell’s Queensland Curtis LNG and Origin’s Australia Pacific LNG have reportedly inked a pipeline deal that would open up new supplies from a Queensland gas field by the year 2024. As per trusted sources, the agreement would pave the way for more gas that can be provided to the east coast of Australia.

Arrow Energy’s Surat Basin project in Queensland, which is regarded as one of the largest onshore undeveloped gas resources in Australia, would get a renewed push with the latest agreement as the company would not need to construct new infrastructure from scratch, cite sources.

Reportedly, Australia Pacific LNG is owned by Sinopec, ConocoPhillips, and Origin while Queensland Curtis LNG is a subsidiary of Shell, which also has a majority stake in Arrow Energy.

Overcoming the need to invest in new gas pipelines and processing infrastructure to develop gas at Arrow Energy, Queensland Curtis LNG would be able to transport and process gas and water from its Surat Basin gas field by utilizing the empty pipeline capacity which is know as ullage. Reportedly, ullage would be used in Australia Pacific LNG’s pipeline network from 2020 to 2035 with an option to extend till 2049.

Sources familiar with the development claim that the deal comes in the backdrop of the government’s announcement of a tax hike of almost USD 6 billion for oil and gas firms targeted as LNG exporters.

Chief Executive of Australia Pacific LNG Warwick King was reportedly quoted stating that the new agreement highlights the company’s focus on offering more gas to the domestic market in Australia. The deal also makes it possible to provide gas in the most efficient way so that the companies can keep the costs lower, King further added.

Australia Pacific LNG has reportedly secured about 350 petajoules of gas from Arrow Energy for a period of 10 years. This extra gas would be utilized for both exports and domestic supplies, cite sources.