The $34 million power station is in the Daandine field, to the south of the Kogan project in the Surat Basin, about 30 km west of Dalby in southeast Queensland.

It is Arrow Energy’s fourth producing project behind Moranbah, Tipton West and Kogan North.

Netherland, Sewell and Associates have certified that the Daandine field has 246 billion cubic feet (Bcf) of probable gas reserves and 362 Bcf of probable and possible gas reserves.

The Daandine power station is fuelled by 2.2 petajoules per annum (PJ/a) of coal seam gas from the Daandine field and is co-located with the Kogan North project’s Gas Processing facilities. Principle exploration targets for the development are the Walloon coal measures.

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Arrow has signed a deal with Australian Pipeline Trust (APA) for the financing and operation of the power station. Under the agreement APA owns and operates the Daandine plant.

Construction began in the first quarter of 2006 with an EPC contract with Clarke Energy, part of the UK-based Clarke Energy Group. First power was achieved in December 2006, within 10 months of the contract award, and full operation and practical completion followed in April this year.

Clarke Energy is now also operating and maintaining the power station under a long term agreement with APA. This is one of two such agreements that Clarke Energy has with APA.

Arrow has an unconditional Gas Tolling Agreement with a subsidiary of APT which establishes a commercial mechanism for Arrow to feed its Daandine field coal seam gas into the power station, and to off-take electricity for sale by Arrow to electricity retailer Country Energy under a long-term Power Purchase Agreement (PPA).

The PPA with Country Energy formalised the electricity retailer’s support of the project with a 10-year purchase commitment for the supply of electricity and associated green energy certificates (GECs and/or NGACs), to the National Electricity Market.

The project gas gathering system was completed, tested and commissioned in December 2006 and the Daandine Power Station generated and exported its first power to the grid shortly after, meeting the company’s goal of first electricity before the end of 2006.

The Daandine field has 15 wells which were drilled and completed in September 2006 and connected to the gas gathering system in February this year. The wells will produce a total of 2 PJ/a of gas supply to the power station, where commissioning continued until the end of March.

Recently the Daandine field was recertified and Arrow’s net 2P gas reserves have increased by 44 per cent, from 498 PJ to 719 PJ. Arrow also recently revised its agreement with Sweden’s Energy Infrastructure Group to farmin to its portfolio of coal seam gas assets in eastern Queensland, increasing EIG’s financial contribution to a maximum of $265 million.

As well as the monetary increase, Arrow also indicated a change in the project interests to be subject to the farmin with a 30 per cent interest in PL 230 replacing a 50 per cent interest in the Daandine Power Generation Project.