THE QUEENSLAND government has given the environmental nod for Arrow Energy’s Bowen Gas Project (BGP).

The decision comes after Arrow, jointly owned by Royal Dutch Shell and PetroChina, announced it would begin front end engineering and design (FEED) work for the proposed upstream gas project

Arrow chief executive Andrew Faulkner said both decisions were critical milestones in progressing the development of its Bowen basin gas reserves.

“We welcome the Queensland government’s approval of the environmental impact statement for the proposed Bowen development,” he said.

The BGP’s EIS covered Arrow’s proposed staged development over about 40 years and was submitted to the state and federal governments in December 2012.

The EIS is a comprehensive study of all environmental, economic, social impacts and benefits arising from the BGP.

The project will now be assessed by the federal government.

BGP involves developing Arrow’s tenements near its existing gas fields, about 150 kilometres south west of Mackay, over 40 years – with the staged expansion of about 4,000 gas wells and gas infrastructure in a 800,000 hectare area.

The BGP will result in a major expansion of the company’s coal seam gas production, with supply earmarked for both domestic and export markets via its proposed Arrow LNG project.

Arrow expects FEED work to take around 12 months to complete.

Mr Faulkner said Arrow had been safely developing CSG from the Bowen basin since 2000 and supplying it commercially since 2004.

Development options for Arrow’s Surat basin gas reserves are progressing, with collaboration discussions with third parties continuing.

In related news, the Clough-AMEC joint venture was awarded the $70 million FEED contract for BGP.

The FEED scope includes engineering, procurement and contracts award for the early works.

“This important contract will extend our presence across the Queensland coal seam gas sector and support the planned growth in our engineering division, while providing an excellent opportunity to showcase the benefits of value focused Australian engineering,” Clough chief executive and managing director Kevin Gallagher said.