Sydney Morning Herald: PetroChina Blames Regulations for Derailing $20b Arrow LNG Project

One of China's biggest investors in Australia has blamed overly strict regulations on compliance and environmental protection for derailing a $20 billion-plus liquefied natural gas project planned in Queensland.

PetroChina's most senior representative in Australia, Jiang Manyu, said the state-owned company was "very disappointed" with the slow progress on the Arrow gas project with Royal Dutch Shell, which was formally cancelled as a stand-alone LNG project last month.

"We feel sad and also disappointed about the progress of Arrow in the past four years," Mr Jiang, PetroChina International Investment Australia general manager, said in an exclusive interview.

"The key reason is the cost and also the very strict regulations on legislation and compliance."

PetroChina has spent "many billions of dollars" on its 50 per cent investment in Arrow, Mr Jiang said, first on buying Australian player Arrow Energy in a $3.5 billion takeover with Shell in 2010, then on a subsequent $535 million acquisition and development work. He said labour and contracting costs had also led to the decision not to go ahead with a stand-alone LNG plant for Arrow gas on Curtis Island in Gladstone, where three other LNG projects are already being built. MORE