‘We can build it as soon as I have the licence’:Santos boss’ bargaining chip for Narrabri gas

The head of energy giant Santos has called on the NSW government to fast-track a pipeline licence to bring forward the controversial Narrabri coal seam gas project to help ease the energy crisis.

Santos chief executive Kevin Gallagher told theHerald that if the government acted quickly the company could have gas running from Narrabri by 2025.

Coal seam gas well in the Pilliga Forest.

Coal seam gas well in the Pilliga Forest.Nick Moir

“I would love it to,but what I need is for the NSW government to give me a pipeline licence. If they want to help us fast-track that process we can build it as soon as I have the licence,” he said.

“I am unlikely to want to spend too much money,given the history of NSW approvals,until I know that I can get the pipeline to evacuate the gas to our customers,” said Gallagher in his first public comments since NSW Premier Dominic Perrottet declared last week that Australia would need gas from the state’s Narrabri project “as soon as possible”.

“We are completely committed to Narrabri and are working with Santos to get that project off the ground,” said the premier as the crisis intensified this month.

Perrottet made the comments last week after the eastern seaboard was threatened with blackouts because soaring coal prices and multiple plant failures meant 25 per cent of coal-fired power capacity was offline.

The Department of Planning and Environment confirmed the government was yet to receive a formal application. A department spokesperson said:“The NSW government is working with Santos on possible pipeline options to connect the Narrabri Gas Project to the East Coast Gas Market.

“While no Pipeline Licence application has been received to date,there are projects at different stages of the planning process that could be developed to connect the project.”

Federal Resources Minister Madeleine King has also backed the project,telling theHerald last week that the Narrabri gas field was an important reserve that could help NSW address a future crisis.

But Georgina Woods,national co-ordinator for environmental pressure group Lock the Gate Alliance,accused the company of using the energy crisis to amplify political support for its controversial and delayed project.

A coal seam gas extraction site in Pilliga State Forest.

A coal seam gas extraction site in Pilliga State Forest.Nick Moir

“There are two potential pipelines that have been floated as ways to get Narrabri gas to market but both of them have been the subject of intense and sustained opposition from landholders up and down the pipeline route,” she said.

“Santos can’t politically bully its way into[the] acceptability of coal seam gas to the rural communities of north-west NSW. I think[Gallagher] is looking for a political quick fix to sustained opposition that Santos has faced for a decade. He is trying to override community opposition by pulling political favours,but the reality is opposition remains as strong and widespread as ever.”

According to Santos,the project would provide the state with abundant gas at a competitive price.

“There’s a lot of gas in Narrabri,I can assure you of that,enough gas to produce 150 terajoules per day into the domestic market for years,” said Gallagher. “We can produce that gas in Narrabri for around $6 a gigajoule,maybe slightly less with technology advances.”

Tony Woods,Energy Program Director at the Grattan Institute,said after a decade of development and debate he was surprised the company was not more advanced in its plans for the pipeline.

“$6[a gigajoule] is a price Santos has been talking about for quite some time,” he said. “By the time you get it to the coast it is probably going to cost about $7/gigajoule. That should be competitive.

“If you are competing with gas from Queensland or maybe a[liquefied natural gas] terminal,that price should be competitive. He will also have security of supply[by] having the gas close.

Ron Campbell,the mayor of Narrabri,and Mark Coulton,federal Nationals MP for Parkes,are both supportive of the project and believe it will bring jobs to the area. The Gomeroi Indigenous people are resisting the development,which will lead to another 850 gas wells in the Pilliga Forest.

The project has been fiercely opposed by activists who fear that,once commenced,it could expand from the Pilliga State Forest into the rich farmland of the Liverpool plains. Climate activists say new gas infrastructure is counter to Australia’s shift to renewables and the federal government’s target to reduce Australian greenhouse gas emissions by 43 per cent by 2030.

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Tim Barlass is a senior writer for The Sydney Morning Herald

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