Santos pleads for Narrabri CSG approval
Santos has issued a plea for the NSW government to outline its approval timeline for its Narrabri CSG project.
Santos has issued a plea for the NSW government to outline its approval timeline for its controversial $3 billion Narrabri coal-seam gas project just days after the Queensland government agreed on a deadline to make a call on Adani’s long-delayed Carmichael coal mine.
The gas producer touts the development — which could supply half the state’s gas needs — as a solution to the tight east coast market, where users are struggling to strike deals at affordable prices.
Santos argues uncertainty over when it will receive a decision in the long-running regulatory process needs to be resolved to bring relief to the state’s struggling manufacturers and heavy industry and provide a cheaper option than looming LNG imports.
The company submitted its environmental impact statement in February 2017 to the NSW Department of Planning and Environment, which is reviewing the project before it proceeds to the state’s Independent Planning Commission.
“I was really pleased to see the Premier in Queensland requesting a timeline for Adani to get a decision and I think that’s what’s been lacking for us as well,” Santos chief executive Kevin Gallagher told The Australian. “We would welcome a timeline being set so we know what we’re dealing with.”
Adani could start building its controversial coalmine in just three weeks after besieged Queensland Premier Annastacia Palaszczuk declared she’d had a “gutful” of delays in her own government’s approvals of the project.
Santos said the lack of clarity over timelines for major resources developments like Narrabri and the Carmichael mine needed to be streamlined by the states.
“This process has been going on for many years,” Mr Gallagher said. “One of the challenges we do have is the lack of timelines around these regulatory processes. That is a huge challenge. If there was something we could work on as regulators and as industry to try and get some of these decisions quicker that would also help the regulators. It would ultimately help make their job easier.”
Even so, Santos may struggle to build the same sort of political pressure when it comes to Narrabri. The coal-seam gas project located in the Gunnedah Basin received a record 23,000 submissions on its environmental impact statement, with many concerned about the development’s potential impact on groundwater and the surrounding agriculture.
And despite high energy prices in the state, there appears little political momentum to open the floodgates for new gas exploration.
The NSW government told The Australian last night there was no timetable for a decision on Narrabri.
“The Department is currently undertaking a rigorous assessment of the merits of the project,” a Department of Planning and Environment spokesperson said. “There is no deadline for determining the application. The application will be referred to the Independent Planning Commission for a final decision.”
Santos has been signing supply pacts with local manufacturers Perdaman, Brickworks and Weston Energy in deals that may strengthen its sales pitch for allowing the project to proceed, given the lack of alternative gas available in the NSW market.
But after sinking $500 million into the project, it wants certainty on the path ahead.
“The exploration spend in recent years has died off considerably on the east coast of Australia and one of the reasons for that is a lot of developers are nervous about spending significant amounts of money to explore when they are not sure if they’ll ever get to develop the resources,” Mr Gallagher said.
NSW, Victoria and South Australia will experience gas shortages on peak demand days from 2023, according to the Australian Energy Market Operator, which big users fear may force heavy industry and local manufacturers to close their operations.
Australian Competition & Consumer Commission chairman Rod Sims said in March that moratoria and regulatory restrictions were impeding gas development and leading to high domestic prices and tight supply.
That looming market shortfall has led to Australia, now the world’s largest LNG exporter, moving ahead with plans to re-import the fuel to ensure sufficient supplies are available.
The Andrew Forrest-backed LNG import facility at Port Kembla is due to start bringing in gas supplies next year and is effectively in competition with Santos for industrial customers.
However, the Santos chief remains confident Narrabri will be the cheapest new supply in the state if it is approved.
“There’s never been a better time to develop the Narrabri gas resource,” he said.