Using undisclosed sources, the Australian Financial Review’s Street Talk column reported that Arrow’s talks with Origin’s Australia Pacific LNG project had come to nothing while Queensland Curtis LNG project leader BG “was also out of the running for any deal”.

If correct, this leaves the Santos-operated Gladstone LNG joint venture as the only remaining option for negotiations on the island if Arrow keeps its own LNG plant-building plans there shelved.

While the column commented that a deal to supply Arrow gas to GLNG made sense, it also claimed that PetroChina wanted an equity stake in an LNG project as something to show “for its heavy investment in Queensland”

However, the existing GLNG joint venture line-up with Petronas, Total SA and Korea Gas Corp also on board was seen as crowded.

“Adding Shell and PetroChina would involve huge additional complications,” the column commented.

“Adding a third LNG train at the GLNG site using Arrow gas also looks highly unlikely given the shortages plaguing the foundation project.”

There is ample opportunity for more speculation yet as Arrow is not responding to such reports.

“Discussions around collaboration are commercial-in-confidence and Arrow is unable to comment,” a spokesman told ENP.

A Santos spokesman also said the company never commented on rumour or speculation.

“I can say that the GLNG project has enough reserves and resources within its project portfolio to supply two trains over the life of the project,” he said.

Earlier this year Arrow stalled its LNG development plans amid reports of mass layoffs.

There are some industry views that Shell and PetroChina might be waiting for a lower cost environment to emerge once the other LNG projects are built on the island.