Santos has announced a new Arcadia Valley coal seam gas project near Injune in south west Queensland.
The project will involve drilling 137 new wells and constructing a 140 kilometre gas and water gathering network, two 4G communication towers, a new compression station, a four megalitre per day water treatment plant, a 5 megawatt gas-fired power station, plus associated roads and infrastructure.
The Arcadia gas project is expected to start production by late next year.
Santos chief executive officer Kevin Gallagher said the initial phase of the development will deliver 75 terajoules/day to the gas supply for the Gladstone liquefied natural gas plant.
Mr Gallagher said the decision to sanction the project follows a 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 per cent since 2015 to become Australia’s lowest cost onshore operator,” Mr Gallagher said.
The $400 million Arcadia coal seam gas project is in addition to the $900 million Santos is spending on upstream developments in the Maranoa, Western Downs, Central Highlands and Banana regions of Queensland during this year.