Santos to spend $400m on Qld gas project

Stuart Layt

Australian energy company Santos will proceed with its $400 million-plus Arcadia gas development in Queensland's Central Highlands.

The project in the Bowen Basin is expected to directly create 300 jobs during construction, which is due to get under way in 2019.

Santos managing director Kevin Gallagher said the project was in addition to the $900 million the company had already invested in Queensland gas supply developments in the Maranoa, Western Downs, Central Highlands and Banana regions this year.

"If you want to put downward pressure on gas prices, reducing the cost of supply is a good place to start," Mr Gallagher said in a statement on Thursday.

The Queensland government welcomed the announcement, with Mines Minister Dr Anthony Lynham saying it shows ongoing confidence in the state's $70 billion LNG industry.

"The construction jobs are particularly welcome, as will be the royalties that will flow to future Queensland budgets to help fund doctors and nurses in hospitals and teachers in schools," Dr Lynham said.

Santos said at its peak, the initial phase of the project, near Injune, north of Roma, will deliver more than 75 terajoules of gas per day to processing facilities.

The Queensland Resources Council hailed the project and praised the state government and the mining industry for leading the way in gas supply.

"We only hope that the other states follow Queensland's lead and open up gas reserves to help fix the energy crisis households and businesses, especially manufacturers, along the eastern seaboard are facing," QRC boss Ian Macfarlane said.

But the Greens said the state Labor government should follow the lead of their Victorian counterparts by banning fracking.

"Fracking puts lives and livelihoods at risk," Greens Senator Andrew Bartlett said.