Morrison government signs off on $3.6 billion Narrabri gas project

The NSW project, proposed by Santos, is subject to further conditions.

A gas well in Narrabri. Picture: Nathan Edwards

The Morrison government has given the green light to 1300 jobs and $3.6bn of investment in ­regional NSW after confirming federal environmental approvals for the Narrabri gas project.

Proposed by South Australian company Santos, the project is expected to supply half of NSW’s gas needs by 2025 and forms part of Scott Morrison’s plan to expand the sector as the energy network reduces its reliance on coal.

Environment Minister Sussan Ley said the NSW project would be subject to conditions ensuring the protection of regional bio­diversity and groundwater.

“I am satisfied that the conditions and the staged nature of work in the area will safeguard the biodiversity of The Pilliga Forest,” Ms Ley said.

She said her approval had been informed by advice from the Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development to “ensure the protection of precious water resources”.

Santos will kick off a 12 to 18-month gas appraisal program for the project, with a final decision on whether to proceed with the investment expected in late 2021 or early 2022.

Labor’s environment spokeswoman Terri Butler would not comment on the approval of Narrabri but said her party backed jobs and investment.

“Any project that can provide jobs, investment and greater energy certainty while protecting the environment is very welcome,” Ms Butler said.

“The government has imposed conditions on the approval. They have a woeful track record of failing to adequately enforce and monitor environmental approval conditions. So the Morrison government must satisfy the Australian people that they will properly monitor and enforce the conditions on this project.”

Santos in September accepted 134 conditions imposed on the development by the NSW Independent Planning Commission, with Ms Ley noting strict conditions on clearing limits and rehabilitation of rural land.

Conditions to protect water, one of the major fears raised among opponents of the project, include an early warning system to monitor water bores and identify issues with aquifers before they occur. It also includes stop-work provisions at gas wells when groundwater limits are forecast.

A $120m community benefit fund will also be set up with local Narrabri residents.

Santos acquired the site in 2011 but its development was delayed by approvals processes. There will be 1300 jobs in the construction phase of the project, and 200 when the ­facility is operational.

Santos chief executive Kevin Gallagher said the conditions were largely in line with its $25bn GLNG project in Queensland, where it has already drilled thousands of coal seam gas wells.

Mr Gallagher said the gas from the project would all be used domestically and “deliver the lowest-cost source of gas for NSW customers” — a claim disputed by critics of the project.

Opponents, like Lock the Gate Alliance co-ordinator Naomi Hogan, said Santos “won’t be able to build this gas field in the face of ongoing community resistance”. “Gas, particularly expensive and polluting coal seam gas like that at Narrabri is not wanted or needed,” Ms Hogan said.

Santos claims gas prices in Sydney would be between 4 per cent and 12 per cent lower from 2025 because of the project. But Australia Institute director Richie Merzian said it would “permanently lock NSW manufacturers into high gas prices”.