The company has entered into a Memorandum of Understanding (MOU) with BP refinery (Bulwer Island) for the supply of up to 15 PJ of gas over 5 years, commencing January 2006.

Arrow will now undertake assessment and feasibility studies for a CBM supply from its tenements in the Dalby area of South East Queensland.

The new deal supports Arrow’s recent MOU with Ergon Energy for up to 2.7 petajoules of coal bed methane per year for 15 years as the State Government utility considers spending $30 million on two new power plants in south-west Queensland.

The Ergon MOU provides for assessment and feasibility studies for a 20MW gas fired electricity generator for network reinforcement in the Oakey region in south-east Queensland and 12MW of well-head electricity generation for a coal seam gas development within ATP 683P near the town of Dalby.

Final feasibility studies for the projects are targeted for completion during 2004.