Santos chief executive, Kevin Gallagher, has told an investor briefing the company will not be “exerting any effort” on its Narrabri gas project while it awaits outstanding approvals, prompting fresh questions about the future of the controversial development.
Gallagher told investors this week the company was prioritising exploration in the Northern Territory’s Beetaloo Basin, where it is pursuing an expansion.
He said a strategic review had determined Santos reserves in eastern Queensland and Western Australia’s Browse Basin should be “deprioritised”.
According to the published briefing, the Narrabri project in north-west New South Wales would be subject to “further review” in 2027 after the company completed an appraisal of its Beetaloo reserves.
“Narrabri, it’s really about just focusing on approvals and … you know, continue with that, but again, not spending any capital or exerting any effort on that route,” Gallagher told investors.
“And some of these [domestic] assets will be re-evaluated once we’ve appraised the Beetaloo, and for obvious reasons.
“If the Beetaloo works, then it changes what we might want to do with some of those assets. There’d be less of a requirement in some cases to do anything with any of them … because the Beetaloo has a scale”.
Gallagher told investors the company believed its acreage in the Beetaloo Basin had enough gas in it “to supply 10m tonnes of LNG and supply the east-coast market for more than 50 years – it’s a phenomenal resource”.
The remarks have prompted more uncertainty for opponents of the Narrabri project. While the project received its main approvals in 2020, other elements, including a production licence, a pipeline licence and development approval for a lateral pipeline, are outstanding. The lateral pipeline would connect to a larger Hunter gas pipeline, which has faced strong opposition from landowners in the region. The gasfield is also subject to a legal challenge from Gomeroi traditional owners under native laws.
Georgina Woods, head of research and investigations for the grassroots anti-mining organisation Lock the Gate, said: “By holding but delaying Narrabri, Santos is prolonging stress and anguish for communities who have already spent more than a decade defending farmland, water and cultural heritage from this destructive proposal.”
“Stop stringing everybody along and spike the project finally,” Woods said.
“It’s not worth anything to them but it’s worth so much to the community – that forest and that aquifer.”
In question time in the NSW parliament this week, the independent MP Roy Butler asked the premier, Chris Minns, about the Santos briefing, which Butler described as “another delay to the Narrabri gas project”. Minns has been a vocal supporter of the development, threatening last year to compulsorily acquire land to clear the way for the Hunter gas pipeline.
Butler said: “Will the government acknowledge that the Narrabri gasfields are smaller than expected and high in carbon dioxide, which is not only contrary to the government’s climate change policies but also makes the gas more expensive to produce?”
Minns responded “it is not necessarily inconsistent with our energy needs in New South Wales”.
The premier said the state would need about 5% of its total energy capacity from “peaking plants”, which generally run only when there is a spike in demand for electricity.
“We will also need gas for our manufacturing industry, and it has to come from somewhere,” he said.
“That is completely consistent with the government’s ambitions in relation to net zero and its massive undertakings in renewable energy investment in this state.”
In response to questions, Minns’ office pointed Guardian Australia to his answer to Butler, which did not directly address the investor briefing or delays to the project.
A Santos spokesperson said the company was continuing to pursue approvals for Narrabri.
“A final investment decision cannot be taken until all necessary approvals are in place, including native title, gas production and pipeline licences,” the spokesperson said.
