Eutility's news

All news articles relating to the energy and telecommunications industries

Santos demands ‘clear timeline’ on Narrabri gas project

Australian energy giant Santos has ramped up pressure on the New South Wales government to provide a clear timetable for the approval of its $3 billion Narrabri gas project, which could supply up to half of the state’s gas needs.

Speculation has been building recently that the Berejiklian government could soon to finalise the approval process for the company’s Narrabri gas venture after long delays and strong opposition concerning the potential environmental impact of drilling on nearby waterways and farmland.

The proposal to drill 850 coal seam gas wells, many of which are within the Pilliga state forest, is being assessed by the state’s Department of Planning, Industry and Environment.

Santos said it had not yet received advice from government officials, but called for a “clear timeline” for the project to be laid out.

“Customers are crying out for Narrabri gas,” a Santos spokeswoman said.

“Santos has always said the environmental impact statement process has to be robust, independent and based on the best available science to provide confidence for the community, but a clear timeline is also important to provide investment certainty for Santos, for NSW gas customers and for the workers that depend on a secure, reliable and affordable gas supply.”

Gas prices in Australia have increased sharply in recent years, placing growing pressure on commercial industrial gas users, particularly in the manufacturing industry.  Major manufacturers have warned that runaway prices were jeopardising investment and forcing their industries offshore.

Rod Sims, the head of the Australian Competition and Consumer Commission, warned in a speech this year that the high cost of gas and electricity was making it “extremely hard” for businesses to compete and posed an “imminent threat”.

After Labor’s shock federal election defeat prompted Queensland Premier Annastacia Palaszczuk to demand a fast-tracking of the approvals for the Adani coal mine in the Galilee Basin, pressure has increased on the NSW government to follow suit on Narrabri.

Ms Palaszczuk, three days after the election, said she was “fed up” with waiting for bureaucratic approvals for the controversial Adani mine and ordered her department officials to provide a definitive timeframe.

Like Adani, the Narrabri project has encountered fierce resistance from environmental groups. Some of the concerns from state agencies and environmental campaigners have centred on issues such salt disposal and monitoring of water and air quality and a heightened fire danger risk.

NSW imports 95 per cent of its gas from other states, increasing the price per gigajoule by as much as $4 just in transport costs, according to Santos.

“Narrabri gas will always be cheaper than gas imported from other states or overseas,” said the Santos spokeswoman. “That’s extremely important for the tens of thousands of commercial and industrial customers, and the hundreds of thousands of manufacturing jobs which rely on it.”

Planning Minister Rob Stokes last week downplayed the rising speculation that an approval for the Narrabri project was imminent, saying the government had “robust and thorough processes” in assessing proposals that have significant implications for the state, its people and its resources.

Deputy Premier and Resources Minister John Barilaro said there was “no deadline for determining the application”, adding the state’s Independent Planning Commission would need to sign off on it.

Supporters of Santos’ Narrabri project say voters had sent clear signals at the federal election that they were most concerned about the economy, energy prices and jobs, not emissions and the environment. And they did not want heavy industry and investment to be pushed offshore.

“Unless we can find a sensible solution to our energy crisis, then all that’s going to happen is we are going to price our manufacturing industries out of Australia,” said Garbis Simonian, chief executive of Weston Energy, one of the customers that has already signed on to buy gas from Santos’ Narrabri project.

Source: Sydney Morning Herald