"This pipeline FEED contract is another important step towards commercialising Arrow's significant gas reserves in the Bowen Basin," Arrow CEO Andrew Faulkner said.

"In September, the company announced it was entering FEED for the Bowen upstream development – the Bowen gas project.

"The proposed pipeline, up to 500km, is a key piece of infrastructure in Arrow's plans to bring gas from the Bowen Basin to market."

Under the contract Worley will produce a “preliminary design for the pipeline”, Arrow said.

While Arrow has been commercially producing Bowen Basin CSG since 2004, Faulkner said development options for Arrow’s Surat Basin CSG reserves in southern Queensland were being progressed.

Arrow stalled its CSG-fuelled Curtis Island LNG plans early this year. In October an Arrow spokesman told ENP that Arrow was seeking the “best way to monetise our gas” at this stage.

Jean-Marie Guillermou, the Asia Pacific head of oil major and Gladstone LNG project partner Total SA, recently told the Australian Financial Review that it was “no secret” that the GLNG JV was negotiating with Arrow.

Arrow, half-owned by Royal Dutch Shell and PetroChina, received federal environmental approval for its Bowen pipeline project in October.