The company, which project managed the coalbed methane development's upstream and downstream portions, said construction of its first project has arrived on time and within budget.

“The entire construction phase, from initial ordering of compressors to the current completion of pre-commissioning has taken a little over 10 months,” company secretary JPK Marshall said.

Of the 31 wells drilled to develop the field, nine have been equipped with pumps and are currently onstream, Arrow said.

“These nine wells have reduced the water levels significantly in the central area of the field and to a lesser extent around the periphery,” Marshall said.

“Desorption of gas has commenced in the centre of the field and continues its initial build.”

Even though the company expects first gas sales well before the March deadline, Marshall said wet weather has restricted access to install pumps on the remaining wells.

As a result, he said de-watering of the field had been slower than planned. But drier conditions in the last week have allowed two crews to arrive on site to bring the remaining wells on line as soon as possible. The company plans to have all 31 wells onstream by the first week of December.

“A combined well flow rate of 3 million cubic feet per day is required to complete the commissioning of the central gas processing facility. Due to the delay in the de-watering of the field, it now seems unlikely that this rate will be achieved in time to meet targeted first gas sales during November,” Marshall said.

“The water flows from the nine wells currently pumping indicate that the permeability and flow capacity of the coals is appreciably greater than anticipated and once all wells are pumping, gas flows are expected to accelerate to commercial rates.”

Development of this project in Surat Basin permit PL 194 will supply 4PJ of gas per annum for 15 years to CS Energy's Swanbank 'E' power plant, in south-east Queensland, via the Roma-to-Brisbane Pipeline.

The Arrow Energy and CS Energy joint venture each hold a 50% interest in the project. Arrow will pay about $25 million or 10% of the project.

Queensland Government owned CS Energy has spent $10.8 million towards the development costs.

Australian Pipeline Trust funded 100% of the construction of the downstream processing facilities, through which it will take the gas.