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The AU$400 million Arcadia investment is in addition to the AU$900 million Santos is investing in upstream developments in the Maranoa, Western Downs, Central Highlands and Banana regions of Queensland this year.
Australian energy company, Santos (ASX:STO) in conjunction with Gladstone LNG will invest more than AU$400 million in the 137-well Arcadia gas project in the Bowen Basin in Queensland’s Central Highlands region. The AU$400 million Arcadia investment is in addition to the AU$900 million Santos is investing in upstream developments in the Maranoa, Western Downs, Central Highlands and Banana regions of Queensland this year.
As quoted in the press release:
“The Arcadia gas project will create up to 300 construction jobs and local business opportunities in the Central Highlands region, helping to sustain and boost the benefits of Santos’ and GLNG’s earlier investments,” said Kevin Gallagher, managing director and CEO of Santos.
“This initial phase of the Arcadia development will at its peak deliver in excess of 75 TJ/day to the gas supply for the GLNG project. This is great news for both the domestic gas market and our LNG exports.”
The project, located near Injune, about 680km northwest of Brisbane, will involve drilling 137 new wells and constructing a 140 km gas and water gathering network, two 4G communication towers, a new compression station, a 4 ML per day water treatment plant, a 5 MW gas-fired power station, and associated roads and infrastructure.
Mr Gallagher said the decision to sanction the project follows a very successful 13-well pilot program which tested changes to the planned well design and operating philosophy.
“We have reduced our connected well costs in Queensland by more than 70 percent since 2015 to become Australia’s lowest cost onshore operator,” said Mr Gallagher. “If you want to put downward pressure on gas prices, reducing the cost of supply is a good place to start.”