Australia's Arrow Energy links up with Shell

SYDNEY, June 2 (Reuters) - Australian coal seam gas producer Arrow Energy Ltd (AOE.AX) said on Monday an arm of Royal Dutch Shell (RDSa.L) will pay as much as A$776 million ($739 million) for an interest in its coal seam gas projects.

As part of the deal, Shell will pay A$644 million for 30 percent of the interest held by Arrow in all of its Australian upstream tenements, Arrow said. Interest in Australia's vast coal seam gas assets has spiked recently due to surging exploration costs in extracting conventional gas offshore, as well as growing difficulties for energy majors to secure access to conventional oil and gas projects globally. ($1=A$1.05) (Reporting by Miranda Maxwell)