Arrow Energy Ltd says the Queensland coal seam gas industry will in five years rival the coal sector in terms of value creation for the Australian economy.
Australia's coal seam gas sector has rapidly evolved over the past few months with the entry of major international players BG Group Plc, Malaysia's national oil company Petronas and Royal Dutch Shell.
They are all jostling to participate in separate liquefied natural gas (LNG) developments in QLD with their Australian partners - using coal seam gas as feed - for export to lucrative Asian markets.
Coal seam gas has never been used as a feedstock for LNG plant's, but Credit Suisse said in a client note that the coal seam gas-LNG proposition had "evolved from concept to almost delivered, in market confidence terms" following recent deals.
Shell, Europe's largest oil company, added to that confidence this week when the group signed a $776 million deal with Arrow to commercialise its vast coal seam gas reserves through a proposed LNG plant.
Arrow's Australian chief executive Shaun Scott said in five years the coal seam gas industry would start to rival the established coal sector in QLD.
"I think it'll be starting to rival the coal industry in terms of the amount of people that it employs and the value that it's creating for the Australian economy," he told ABC Television.
Arrow has an agreement with LNG Pty Ltd, the company that proposes to build the LNG plant, to supply 55 petajoules of gas per year from 2010 to a 1.3 million-tonne-a-year facility at Gladstone.
The $776 million staggered investment by Shell will allow the oil giant take a 30 per cent stake in Arrow's domestic coal seam gas tenements and 10 per cent interest in its international assets