A deal to extract gas from Queensland's Surat Basin will create 1,000 new jobs, boost domestic gas supply, and unlock one of the largest gas reserves on the east coast, the resources industry says.
Arrow Energy has signed a 27-year agreement to supply more than four times the forecast east coast domestic gas shortfall to Shell's Queensland Curtis Liquified Natural Gas project every year.
Arrow Energy CEO Qian Mingyang said the company's equal shareholders PetroChina and Shell had approved the agreement, which offers long-awaited infrastructure collaboration in the natural gas industry.
"It will create better cost efficiencies and enable us to bring this gas to market in a challenging investment climate," Mr Qian said.
He said utilising existing pipelines and infrastructure would reduce the impacts on landholders and local communities.
Mr Qian said work would commence from the expansion of Arrow's Tipton fields, near Dalby, and build two new development areas from around 2021.
The Queensland Resources Council's chief executive, Ian MacFarlane, said the agreement demonstrated that Queensland was leading the rest of Australia in working to address the gas shortage.
"This one agreement alone will deliver enough extra gas to more than power Queensland's entire industrial demand every year out to 2047," he said.
He said scaling up production would help to get gas out of the ground at an affordable price.
"More gas being produced is good news for all gas customers both domestic and export," Mr MacFarlane said.
Queensland Resources Minister Anthony Lynham said a reliable and accessible gas supply was critical.
"The Government will be interested in the company's proposals for domestic gas supply and their production timeline," he said.
"It's important for industry and jobs that more gas gets to market."
