PERTH (miningweekly.com) – Federal Environment Minister Sussan Ley has given environmental approval for oil and gas major Santos’ Narrabri gas project, in the Gunnedah basin, subject to a number of conditions.

The approval conditions include an early warning system that would include ongoing bore monitoring and modelling to identify potential impacts on groundwater, a robust chemical risk assessment framework, and a community benefit fund of up to A$120-million to share the ongoing benefit of the project with the Narrabri community.

“I am satisfied that the conditions, and the staged nature of work in the area, will safeguard the biodiversity of the Pilliga Forest,” Ley said. 

“My approval has also been informed by advice from the Commonwealth Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development (IESC) to ensure the ongoing protection of precious water resources.” 

Santos has welcomed the federal approval, saying it would now embark on a 12 to 18 month appraisal programme ahead of a final investment decision.

MD and CEO Kevin Gallagher said the conditions on the approval were consistent with those already set by the New South Wales Independent Planning Commission and generally in line with those for the company’s Gladstone liquefied natural gas (GLNG) operations.

“We accept the conditions from the Commonwealth, which are very much in line with our other operations across the country and welcome the approval that all relevant matters of national environmental significance have been adequately addressed,” Gallagher said.

“Santos is excited about the prospect of developing the Narrabri gas project, a 100% domestic gas project that will deliver the lowest-cost source of gas for New South Wales customers. The approval process has been comprehensive, transparent and inclusive, providing the community with confidence the project has been properly evaluated using the best available science, is in the public interest and is capable of development without harm to water resources or the environment.

“As the economy recovers from Covid-19, game-changing projects like Narrabri are critical to creating jobs, driving investment, turbo-charging regional development and delivering more competitive energy prices,” Gallagher said.

Santos has already commenced workover activities on existing wells under its current exploration tenures and is working to get various agreements in place that are required prior to the next phase of development.

“This is a significant step forward for the Narrabri community, a majority of whom support the project and the jobs, business opportunities, infrastructure and community investment that will come with it.

“Santos already has appraisal wells feeding the Wilga Park power station powering the equivalent of 32 000 households in north-west New South Wales, there are 16 Santos people and their families living and working locally and we’re buying goods and services locally with a spend last year of A$2-million.

“Now all we want to do is to get on with creating jobs in New South Wales and Narrabri, and making a real difference to people’s lives in rural and regional communities,” Gallagher said.

Federal Resources Minister Keith Pitt said that the positive environmental decision paved the way for Australia to make the most of its abundant natural gas resource, and would provide a boost to the local manufacturing industry.

He said that the Narrabri approval also backs the government’s gas-fired recovery announcement. As part of the government’s 13-point plan to ensure Australian gas is working to benefit all Australians, unlocking supply is a crucial element to help drive down prices.

Meanwhile, the New South Wales government on Tuesday released a strategic statement outlining its ongoing support for the domestic gas industry as a driver of new jobs, coinciding with a commitment to investigate a potential Narrabri Special Activation Precinct, which would streamline planning processes, create new jobs and fuel regional economic development. 

Deputy Premier John Barilaro said with the recent Independent Planning Commission’s approval of the Narrabri gas project and investment around the Narrabri Inland Port, now is the right time to investigate a Narrabri precinct. 

“Today we are releasing the New South Wales government’s statement of support for the future growth of the gas industry, backing investments like the Narrabri gas project that will provide a A$3.6-billion economic boost and create around 1 500 new jobs,” Barilaro said. 

“This gas project opens up a wide range of industry growth opportunities in manufacturing everything from plastics to fertiliser and construction materials.

“This is great news for the local economy, and it is why the government will now start investigating a potential Special Activation Precinct in Narrabri. We want to create a thriving energy hub in Narrabri focused on value-added production and manufacturing to power long-term job opportunities across the region.” 

The Australian Petroleum Production and Exploration Association (Appea) has welcomed both the environmental approval of the Narrabri project and the state government’s acknowledgement of the importance of the sector to the regional economy.

“The recently approved Narrabri gas project will deliver natural gas for New South Wales homes, small businesses, major industries and electricity generators, bringing substantial economic benefits to Narrabri and the surrounding region,” said Appea CEO Andrew McConville.

“The project will help to build stronger and more vibrant regional communities through significant community investment.  It will also provide energy security and reliability for the state of New South Wales.

“Industry strongly supports the view that more onshore exploration will deliver more affordable gas to New South Wales consumers. The most effective way to put downward pressure on gas prices for customers, including manufacturers, is to increase supply and competition in the domestic market.”

McConville said to boost supply, there must be an attractive and supportive investment environment underpinned by an appropriate and comprehensive regulatory regime, rather than any further intervention in the gas market.