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Shell and Arrow Energy Ltd plan gas alliance


Shell Exploration Company B.V. (Shell) and Arrow Energy Ltd. (Arrow), have signed a preliminary agreement to jointly develop projects to extract clean-burning natural gas from coal deposits in Australia, China, Indonesia, Vietnam and India.

The alliance with Australian company Arrow will boost Shell’s existing strategic positions in potential coal seam gas (CSG)areas including China, where Arrow’s international acreage is an excellent fit.

Arrow has significant CSG production facilities in Queensland, Australia, where it is the largest CSG acreage holder. It has four producing projects in Queensland, and supplies gas for industrial users such as power stations.

The memorandum of understanding calls for Shell to acquire a 30% interest in Arrow’s CSG acreage in Queensland, Australia, as well as a 10% stake in Arrow International - a wholly owned subsidiary of Arrow Energy Ltd, which holds Arrow’s international interests in CSG opportunities. The agreement also gives Shell a five-year option to acquire up to 50% of individual Arrow International projects, which includes activities in China.

Under the deal Shell would also acquire the right to negotiate an agreement to purchase any liquefied natural gas that may potentially be produced from the CSG operations.

Shell and Arrow have also agreed to undertake further research and development in this important and growing area of gas supply. Shell will also assign at least five personnel to work at Arrow’s operations. The total value of the agreement is expected to be up to US$0.7 billion. Completion of a definitive agreement is anticipated in the near term.

Chris Gunner, Chief Operating Officer for Shell Development (Australia) Pty Ltd, said: “This proposed alliance between Shell and Arrow would combine the complementary strengths of our two companies. Shell has global gas marketing and financial strengths coupled with leading research capabilities. Arrow has proven CSG expertise, and extensive Australian and international CSG acreage positions. We look forward to working with Arrow and creating an alliance that should become a significant force in the development of CSG resources.”

Media inquiries:

Shell Group Media Relations
Tel: +44 (0)20 7934 3505

Shell Development (Australia) Pty Ltd
Tel: +61 (0)8 9213 4613

Notes to Editors:

Arrow Energy Ltd.

Arrow Energy is a leading Australian integrated energy company focused on the development of coal seam gas throughout eastern Australia and Asia. Its worldwide interests span coal seam gas developments, pipeline assets, electricity generation and investments in liquefied-natural gas projects. It is one of Australia’s top 200 publicly-listed companies, and has a current market capitalisation of more than AUS$2 billion. As Australia’s largest coal seam gas acreage holder, the company is now driving growth by investing in downstream projects and international markets to secure higher margin sales. Arrow has access to more than 90,000 km2 of coal seam gas exploration tenements close to Queensland’s three key markets - Townsville, Gladstone and Brisbane. Its four producing projects currently account for more than 20 percent of Queensland’s overall gas production.

Arrow has also issued a press release and stock exchange announcement regarding this preliminary agreement, which can be found on their web site - .


 Arrow Energy
 natural gas
 coal deposits

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