Santos boosts nation’s gas supplies with new rig in Cooper Basin

Santos is establishing a new drilling rig in the Cooper Basin to boost national gas supplies as wholesale power and gas prices soar.

Australia’s gas supplies will be bolstered with a new drilling rig in the Cooper Basin, where Santos has promised to spend more than $430m this year to help stem the gas crisis.

As wholesale power and gas prices climb amid cold weather, Santos Boss Kevin Gallagher has revealed the oil and gas giant will establish a fifth drilling rig in the basin, which would provide an extra 15 terajoules per day by the end of this year.

“Santos will invest more than $430m in the Cooper Basin this year developing and supplying critical fuels such as natural gas for our customers,” Mr Gallagher said.

“This investment will deliver more gas to the market, which is desperately needed.”

Mr Gallagher said a spike in gas-fired power to back up renewables and replace at least 30 per cent of coal-fired power had caused domestic supply crunches and price hikes.

Speaking at the Melbourne Mining Club last week, Mr Gallagher said the east coast’s energy crisis was a “prime example of what happens if the energy transition is focused only on stopping new oil and gas projects”.

“The scarcity of new developments today is frightening, with forecasts of tight supply over coming years,” he said.

Santos is attempting to fast-track its controversial Narrabri coal-seam gas project amid the worsening energy crisis felt in Australia’s eastern states.

“Customers are crying out for this gas with more demand than we can meet when it comes to market around 2026,” he said.

Mr Gallagher blamed “more than a decade of energy policy failure” for the current domestic price shocks.

Santos drilling rig at well in Cooper Basin.

State Energy Minister Tom Koutsantonis welcomed the new drilling operation in the Cooper Basin, which straddles South Australia’s border with Queensland.

“My understanding is most South Australian companies have contracted gas, so they’re largely unaffected, but the security of the entire system is important,” he said.

“It is good that gas is stepping up, it’s a lower emission fuel, so it’s important that Santos do their bit – they volunteered to do it and they should be applauded for it.”

New National Party leader David Littleproud urged the new federal government to get on the phone with gas companies to fix the crisis.

“The one lever that (Energy Minister) Chris Bowen hasn’t been able to pull is that to pick up the phone and talk to the gas companies,” Mr Littleproud told ABC’s Insiders program on Sunday.

“That’s the action that we have been able to do in the past, because we had a relationship with them.”

Mr Bowen said the government was “actively managing” the energy crisis and the Australian Energy Market Operators’ gas supply guarantee had been activated in the south east to ensure enough supply.