The company today said the $9-14 million program would target additional proven and probable (2P) reserve certification of at least 700 petajoules of CSM in the Gladstone to Townsville corridor over the next 12 months.

Arrow said the quantity will be on top of current, on-going reserve certification work and will enable extra new, long-term gas sale contracts to be written for up to 35PJ per annum.

It said the program was devised in response to a growing number of enquiries from potential customers following ongoing uncertainty over the likelihood and timing of the PNG Gas pipeline project.

Interestingly, Arrow’s equal partner in the Moranbah project is Australian Gas Light, which is one of the contractors for construction of the Australian leg of the pipeline, as well as a partner in the upstream PNG gas project.

AGL recently halted front-end enginnering and design work on the pipeline, partly because of concerns that Queensland CSM was eating into the PNG pipeline’s projected market share.

“This accelerated investment in reserves certification in this highly productive coal seam gas area is a key component of Arrow’s post-CH4 merger strategy to drive growth in shareholder value by building on the skills and asset base of the merged companies and dynamically focusing on those opportunities that can provide the most significant value add to the company,” it said.

“This program will provide significant reserves to anchor the Moranbah-Gladstone pipeline and achieve reserves critical mass to underpin Arrow’s coastal Queensland high margin products [gas-to-liquids, LNG, CNG] strategy.”

The program will focus on known productive seams in step-out areas and at least one well will target a test of the Fort Cooper Coal Measures (FCCM).

Arrow said the FCCM has exhibited net coal thickness of up to 50m and there have been previously measured high gas contents.

“The FCCM seams are laterally extensive across the Moranbah area but their possible resource has not previously been included in Moranbah area resource assessments,” it said.

“If proven to be productive, these seams could add multiple Tcfs (trillion cubic feet) of contingent resource as yet uncertified in the FCCM.”

The Moranbah Gas project is held in equal partnership between AGL and Arrow, which is also the operator and has the sole exploration, operating, and marketing rights over all of the underlying exploration tenement area of ATP 364P in the northern Bowen Basin region.

It is Australia’s largest coal seam methane project.