Narrabri $3bn gas project likely to be fast-tracked under Minns

The Minns government is expected to fast track the $3.5bn Narrabri gas project in a bid to avoid looming energy shortfalls.

Farmer Peter Gett from Tintsfield farm has four gas production wells on his property in Narrabri. Picture: Jonathan Ng

The Minns government is expected to fast-track the $3.5bn Narrabri gas project – which aims to supply up to half of NSW’s gas needs by 2025 – in a bid to avoid looming energy shortfalls.

The gas project has been supported by both the Coalition and Labor but the regulatory process has been plagued by delays, particularly for the vital Hunter Gas Pipeline that will connect the Narrabri project to the market.

The Australian understands incoming premier Chris Minns met Santos chief executive Kevin Gallagher before the election to discuss the project and that Labor is keen to get the project moving.

The gas industry is urging Mr Minns to fast-track the project, which has already cost energy giant Santos more than $1.5bn. The Australian Petroleum Production & Exploration Association said the government needed to provide a clear strategy to promote investment in new supply to avoid forecast shortfalls in the east coast energy market and put downward pressure on prices.

“This could include fast-tracking new supply options like the long-delayed Narrabri gas project, which could supply enough natural gas to meet up to half of the state’s gas demand,” APPEA chief executive Samantha McCulloch said.

“NSW is a big gas user but has left its own reserves in the ground and outsourced its energy security, exacerbating the cost-of-living pressures on NSW households and businesses.”

Ms McCulloch said repeated warnings from independent authorities such as the Australian Competition & Consumer Commission and the Australian Energy Market Operator could not be ignored in the state any longer.

Farmer Peter Gett in his property near Narrabri. Picture: Britta Campion

“The ACCC and AEMO are both clear – without investment in new gas supply and gas infrastructure, southern states including NSW could experience temporary shortfalls as early as this winter with sustained shortfalls in supply from 2027 onwards. Bans and regulatory uncertainty have made new supply investment very difficult and left users paying $2/GJ extra when gas is transported from Queensland, often over untapped NSW reserves.”

Ms McCulloch noted that Queensland had forecast $7bn in gas royalties in coming years from its coal-seam gas and liquefied natural gas developments, while NSW was “missing out on the public revenue and jobs that local gas production provides while risking the lights going out”.

EnergyQuest chief executive Graeme Bethune told The Australian there was “a strong imper­ative to fast-track the project, particularly after AEMO’s last Gas Statement of Opportunities”. “Getting the pipeline proposals approved quickly is the next significant step,” he said.

Santos declined to comment on whether the Labor-Greens deal on the safeguard mechanism announced on Monday would affect the project.

Before the state election the NSW Greens made it clear a Minns government would have to agree to scrap the Narrabri gas project if it wanted support in the event of a hung parliament, but the extent of the swing to Labor means it will not have to depend on the Greens to form government.

The Perrottet government declared the 50km-long pipeline critical infrastructure in December because it was deemed essential to NSW for economic reasons. NSW energy minister Matt Kean gave authority to allow Santos to survey on private property if a deal with landowners could not be reached.

The project has faced staunch opposition from local farmers.