Resources giant Santos has told a parliamentary inquiry it will withdraw an application to build a coal seam gas (CSG) pipeline in the central west of NSW.
The Mullaley pipeline from Narrabri to Wellington had been proposed by Eastern Star Gas.
From noon on Thursday, Santos will officially take over the smaller company, which had originally put in the application for that pipeline.
Santos Vice president for eastern Australia, James Baulderstone, told the ParliamentaryInquiry in Sydney into Coal Seam Gas that Santos was reviewing Eastern Star's plans and was yet to settle its own commercial arrangements for the company.
"However, as an act of good faith we are committing today to withdraw Eastern Star's application for the current Mullaley pipeline route," he said.
Mr Baulderstone said Santos had decided to take over Eastern Star gas to bring better practices into NSW.
Santos says it was also responding to community angst about the pipeline.
The CSG inquiry is also hearing from the NSW Farmers Association and the anti-coal seam gas alliance Lock the Gate.
The inquiry follows a six month moratorium on CSG exploration in NSW.
NSW Labor leader John Robertson last week called for a complete moratorium on exploratory drilling until science proved it was safe.
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