Shell Australia said it welcomed the gas sales agreement between Arrow and QCLNG - two separate joint ventures in which Shell participates.
Under the deal un-contracted gas from Arrow's Surat Basin fields would flow to the QCLNG project (involving Shell, CNOOC and Tokyo Gas) that would then sell gas to local customers and also export it through its gas plant on Curtis Island.
Shell chairman Zoe Yujnovich said the deal paved the way for a staged development of Arrow's world class gas resource.
Ms Yujnovich said QCLNG had existing pipelines, processing plants and had developed ways of supplying gas to both local and international customers - while Arrow had developed the expertise needed to extract gas from its fields in the Surat Basin.
"Onshore gas developed in Queensland has none of the oil produced by traditional gas fields, and is expensive to develop - so without the scale of LNG development it would simply stay in the ground", she said.
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