Santos pitches Narrabri as D-Day approaches
Santos has sought to assuage concern over its $3.5bn Narrabri CSG project in NSW ahead of a crucial planning tour.
Santos has sought to assuage environmental concerns over its $3.5bn Narrabri coal-seam gas project in NSW ahead of a crucial site tour by the planning commissioners responsible for deciding the fate of the controversial development.
Senior executives from the gas producer — backed by a team of external legal, environmental and economic experts — held a meeting with NSW’s Independent Planning Commission on June 25 in a bid to win its backing for the facility, which aims to supply half the state’s gas needs.
The NSW Department of Planning, which in June approved Santos’s proposal after a three-year process, also made a presentation to the IPC on the same day, as the planning body races to make a decision within its 12-week deadline of September 4.
The IPC quizzed Santos over the likely pipeline route to deliver gas to market should it be successful, the expected carbon emissions from gas wells, the risk of an extreme weather event disrupting ponds where salt from the gas extraction process will be stored, and whether Narrabri will lead to lower gas prices for the state.
IPC Panel chair Steve O’Connor, along with commissioners John Hann and Professor Snow Barlow, will kick off a two-day tour of the Narrabri project on Monday. It will include a full-day site inspection in the Pilliga Forest with Santos staff and a small number of “independent community observers” selected by the IPC to join the visit because of their submissions on the gas development.
The IPC Panel will also meet on Tuesday with Narrabri Shire Council, which indicated its support for the project at a November council meeting.
Mr Hann was on the IPC Panel that refused consent for both the Rocky Hill coking coal mine for NSW’s Hunter Valley and Anglo American’s Drayton South project, with neither proposal deemed in the public interest.
Mr Hann quizzed Santos on its groundwater studies and how data would be made publicly available, along with whether Santos could quantify what its promise of a “downward price effect” meant for users in the market.
Santos corporate affairs executive Tracey Winters responded by quoting an ACCC report which said “southern customers pay $2 to $4 per gigajoule more for gas because of the transportation from South Australia or Queensland into NSW and South Australian markets, so developing the gas locally, we will, you know, put downward pressure on those local prices.”
The price of gas on Australia’s east coast remains a contentious issue, with fertiliser and explosives maker Incitec Pivot disputing a claim made by energy major ExxonMobil that increased supply will lower tariffs.
Professor Barlow asked how much gas would be used by chemical producer Perdaman, which hopes to build a $2bn ammonia plant using supplies from Narrabri. Santos was unaware of the volumes, but pledged to provide a written response.
The question of whether Santos would opt for APA to build a pipeline to deliver gas to market or an alternative $1.2bn Hunter pipeline was also probed.
Santos said it was still pondering a decision and noted the proposed Perdaman plant would be a consideration.
“I can say that we’re continuing to work with APA on the potential for that project; however, the Hunter gas pipeline, which is the second option, already has a development consent,” Ms Winters said.
“We have multiple evacuation pathways, including you would probably be aware that we have a memorandum of understanding with a company that’s proposing a fertiliser plant on the Narrabri industrial estate. So those options are still under project consideration.”
A week-long public hearing for Narrabri will start on July 20, leaving the IPC a little over a month before it makes its final decision.
The Narrabri project received a record 23,000 submissions on its environmental impact statement, with 98 per cent opposed to the project. About a third of local submissions supported the development.
The Department of Planning recommended the project despite significant community concerns over the long-term effect on water supplies and contamination of agricultural land.
Santos also signed a memorandum of understanding with the Colorado-based Natural Soda on Monday to create a sodium bicarbonate or baking soda industry using salt removed from Narrabri’s produced water.
“The water Santos extracts is of no use to farmers because of the salt content, so we treat the water to a very high standard that is suitable for irrigation, stock watering and other purposes. The salt removed from the water is a natural product and, if our concept study is successful, could be converted into valuable sodium bicarbonate,” Santos chief executive Kevin Gallagher said.
Narrabri would help ease a forecast 2024 gas shortfall for domestic users on the east coast and lower gas prices, while also supporting the development of gas-fired power stations in NSW to help move away from coal-fired power plants, the department concluded.
The project, largely in the Pilliga state forest, has been on the drawing board since 2011 when Santos bought the John Anderson-chaired Eastern Star Gas.
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