Shell has announced an investment in the next phase of the Surat Gas Project in Queensland, Australia, as it moves to expand gas production from the Arrow Energy joint venture.

Arrow Energy, which is jointly owned by Shell and PetroChina, is developing the project to supply natural gas to the Queensland Curtis Liquefied Natural Gas (QCLNG) export facility. The development is expected to produce about 79 million standard cubic feet of gas per day at peak output, with first gas targeted for 2028.

The company did not disclose the value of the investment.

The expansion comes as Australia’s east coast gas industry faces increasing pressure to balance LNG exports with domestic supply. The Australian government plans to introduce a policy next year requiring LNG projects to reserve 20 per cent of their gas production for the local market.

Shell Australia Chair Cecile Wake said natural gas will remain an important part of Australia’s energy system during the transition to lower-carbon energy. She added that maintaining a well-supplied domestic market alongside a strong LNG export sector is vital for the country’s energy future.

QCLNG, which is operated by Shell, exports more than 8 million metric tonnes of LNG each year. Its partners include China’s CNOOC, which holds a 25 per cent stake, and U.S.-based MidOcean Energy, which owns 1.25 per cent.