D-Day for Santos’s Narrabri gas hopes
Santos is edging closer to receiving a decision on its $3bn Narrabri gas project.
Santos is edging closer to receiving a decision on its $3bn Narrabri gas project, with NSW authorities concluding their assessment of the development before facing a final review from the state’s Independent Planning Commission.
With an energy deal between the NSW and federal governments for the state to boost domestic gas supplies to be announced on Friday, the drawn-out Narrabri planning process is poised to move to the last stage with a decision expected in the next few months.
Under the energy pact agreed between the two governments, NSW will supply an extra 70 petajoules of gas into the domestic market each year.
While that roughly matches expected output from the Narrabri coal-seam gas project, the government pact does not assume the project will be approved, with the onus on the NSW government to facilitate new gas developments should it be knocked back.
State government sources said the Independent Planning Commission was unlikely to request any additional assessments of Narrabri given the extensive environmental and stakeholder studies already undertaken.
However, NSW Planning Minister Rob Stokes may choose to first release the results of a review into the IPC itself by the state’s Productivity Commissioner Peter Achterstraat which was handed to the government a week before Christmas, according to sources.
That may ease any complications should the government recommend changes to the role of the IPC.
The planning tsar has courted controversy from some quarters over accusations it risks being dominated by special interest groups, potentially damaging the plight of major gas and coal projects in the state.
Santos has been frustrated by the long-winded regulatory hurdles, arguing the development could help ease the tight east coast market by providing up to half the state’s gas needs.
The South Australian producer submitted its environmental impact statement for Narrabri in February 2017 to the NSW Department of Planning and Environment.
Santos chief executive Kevin Gallagher said he was hopeful of receiving approvals.
“We are looking for that to conclude shortly and we are looking for a positive recommendation to go to the IPC,” Mr Gallagher said in Sydney. “We are very confident the project will stand on its merits.”
Any further delays would prolong the state’s dependency on imported supplies, which currently account for 95 per cent of its gas needs.
“For every year it gets delayed, that’s a year later that it’s going to come online. We’re keen to get that gas into the NSW market.”
The Santos chief also hinted that should it win clearances and ultimately approve a final investment decision on the project, changes could be made to the joint venture relationship. Power giant EnergyAustralia owns a 20 per cent stake in the development with Santos holding the 80 per cent balance currently.
Santos on Thursday teamed up with fellow Cooper Basin producer Beach Energy to sign a six-year extension for the supply of gas to Australia’s largest plastics producer, Qenos, for its Botany facility in NSW.
Santos and Beach will supply 87 petajoules of gas from their Cooper Basin operations under a contract that runs until the end of 2025.
Qenos — owned by chemical giant ChemChina — has been a vocal critic of government policies, which it argues have left insufficient supplies of gas for heavy industry to invest in its long-term plans.
It said the ethane gas contract would buoy the nation’s chemical sector but called for more to be done.