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Santos sees $3b Narrabri coal seam gas approval by year end
Angela Macdonald-Smith

Mr Gallagher said he is hopeful to secure NSW government approval for the project by the end of the year, and again committed to sell all the gas produced to domestic customers, signalling that a gas reservation requirement as being contemplated by the federal government is no obstacle to going ahead.

He said meetings he took part in Narrabri on Tuesday with stakeholders in the project were supportive.

"There's a lot of optimism, and a lot of enthusiasm for the project in the region, particularly given we've now got a lot of customers coming forward," he said, referring to recent preliminary sales accords for Narrabri gas with Brickworks, Weston Energy and Perdaman Group.

He said he believed the success in signing up domestic customers meant the project was getting traction with NSW Premier Gladys Berejiklian.

"The headwinds are slowly shifting and I would describe them as not quite tailwinds yet but on the way to becoming tailwinds," Mr Gallagher told the Credit Suisse Australian Energy Conference in Sydney.

The comments come as the federal government considers potential measures to reserve part of the gas in new development projects for the local market to ease the current squeeze on prices

The Narrabri project, which is fiercely opposed by environmentalists because of risks to water and land resources, could supply up to half of the gas needs of NSW, which currently imports 96 per cent of its requirements and where manufacturers are struggling with price hikes.

"We're expecting soon the project to get put into the hands of the Independent Planning Commission; we are still hopeful that by the end of this year we can get that EIS [environmental impacts statement] approved and we can move forward with the project," Mr Gallagher said.

A Santos spokeswoman said the company has already said it is prepared to accept a condition for approval of the project that 100 per cent of the gas is sold into the domestic market.

Lock the Gate Alliance accused Santos of "playing politics" with Narrabri gas, instead of sticking to science and proper process.

Alliance spokeswoman Georgina Woods accused Santos of "inappropriate political interference" in the approvals process.

“It’s a bit rich for Santos to throw the blame around now and try to use politics to bypass environmental laws, especially when there is a gas import terminal which is well ahead of Santos’s project and properly going through the assessment process," she said, describing Santos as the "key architect" of the gas price crisis in the eastern states.

Mr Gallagher said Narrabri would beat LNG imports "hands down" on pricing.

"Narrabri will be the lowest cost of supply gas going into the New South Wales market by a country mile," he said.


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