“We need capital and people in order to develop some promising projects, and we are looking for GAIL to provide both of those,” Arrow chief executive Nick Davies told EnergyReview.net.

“GAIL wants us to provide technical expertise in coal seam gas exploration and production.”

GAIL will help to fund projects in Australia, investing in exploration, appraisal and development, and is likely to second staff to help Arrow, which will in turn train these workers in skills that can be taken back to India for future GAIL-Arrow joint ventures, according to Davies.

Arrow has about 10 projects in its ‘queue’ – promising prospects waiting for capital injections so that they can be developed, Davies said.

“The top priorities are exploring and appraising the Clarence-Moreton Basin south of Brisbane, the Styx River Basin north of Rockhampton and the Nagoorin Graben near Gladstone,” he said.

“We’ve made good find in these areas. In the Nagoorin Graben, our second Boyne River well found 90 metres of net coal. In the Clarence-Moreton Basin we drilled 11 wells and 10 were successful.”

The partners are also hoping to get some CSM projects underway in India, a huge market with higher gas prices than Australia where success could greatly boost Arrow’s market cap.

GAIL is one of the giants in Indian energy but it has no expertise in CSM and it failed to win blocks in India’s last licensing round for CSM. In India, CSM is known as coal bed methane (CBM).

“GAIL lost out due to a lack of technical expertise. They are looking for a partner who can tick that box,” Davies said.

The Indian Government has announced the CBM3 licensing round and a GAIL-Arrow joint venture is very likely to bid for blocks. The round will close in July and blocks will be awarded in September.