By Peter Mitchley, Santos General Manager Energy NSW
Santos is a proud Australian company that has been exploring for and producing natural gas for over 50 years, and has been supplying gas to NSW for close to 40 years from its Moomba fields in South Australia. The proposed Narrabri Gas Project, located in the north-west of the State, will be the company’s first large-scale project in NSW.
Natural gas is an important source of energy for Australian households and businesses. The Narrabri Gas Project has the potential to supply up to half of the State’s natural gas needs as early as 2017, delivering gas to the NSW market when households and manufacturers need it most.
Without gas infrastructure development, businesses across the State, including large industrial customers, could face difficult decisions about their ongoing viability in the face of high gas prices or limited supply. Households would also likely feel the impact of rising gas prices.
Therefore, the NSW Government has recognised the strategic importance of the Narrabri Gas Project to the State’s energy needs, initiating a Memorandum of Understanding with Santos that commits to a timely assessment of the Project.
This landmark agreement stresses the importance of developing a sustainable natural gas industry to underpin and grow the State’s economic competitiveness.
The MOU does not guarantee a certain outcome from the assessment process. The Narrabri Gas Project will still be subject to the full stringent regulatory controls in place and Santos will continue to work within existing statutory timeframes.
The Narrabri Gas Project represents a significant economic opportunity for regional NSW. The Project will deliver much-needed investment and employment opportunities, including: 1,200 jobs during Project construction; up to 200 ongoing positions; and $160 million via a Regional Community Benefit Fund for local infrastructure and services in consultation with the local community.
The Project will also involve the construction of a pipeline running south from the Narrabri area to deliver the gas to the NSW market.
Santos has a vested interest in protecting the region’s valuable agricultural land and water resources, and we have made substantial commitments to environmental protection and the safety of our operations. We know that we can only gain community trust by being open about our plans, operating responsibly and with minimal environmental impact.
Santos’ long-term plans involve the drilling of 850 wells in and around the Pilliga, south of Narrabri. Although the Project area covers around 98,000 hectares, field operations will take up less than one per cent of that area, about 900 hectares.
Horizontal drilling will be used to reduce the Project’s footprint and restrict the number of well-pad sites to 425. As wells are drilled, other wells will be decommissioned and the sites rehabilitated to minimise potential disturbance to landholders and the landscape. This process will continue over the 20-25 year life of the Project.
Our activities located in the Pilliga will be restricted to those areas reserved by the NSW Government for logging, gas development and other commercial activities. Drilling on private land will only occur where we have the voluntary consent of the landholder.
Currently Santos is carrying out a limited exploration and appraisal program of 16 wells in the Pilliga, in addition to flora and fauna studies, water monitoring, air measurements and social impact studies.
This work will enable us to finalise our plans, submit our Environmental Impact Statement to the NSW Government and provide a solid foundation against which to measure our performance over the coming years.
Work is also underway on the Leewood Water Treatment Facility, located outside the Pilliga, which will handle water extracted during operations. Once the water is brought to the surface, it will be transported via an underground flow line to the Leewood Facility where it will be stored and treated for reuse.
A central gas processing unit will treat and compress the natural gas to Australian pipeline requirements, readying it for transport to market.
The Narrabri Gas Project represents an opportunity to deliver a cleaner form of energy in a safe manner, to put downward pressure on rising energy costs in NSW, to provide a separate income stream for landholders hosting our development, to generate local ongoing jobs and to provide significant community benefits.
The assessment process and the requisite community consultation will take place over the next 12 months, and Santos will continue to work with the community in an open and transparent way to ensure a better understanding of the Project and to address community concerns.