Oz Santos Inks Narrabri Gas Deal
Santos February 27 said its proposed Narrabri gas project in New South Wales will supply gas to Perdaman’s planned new ammonium nitrate plant near Narrabri which will produce fertiliser for agribusiness.
As per a non-binding agreement signed between the two parties, Santos will supply 14.5 petajoules/year (387mn m3/year) of gas for 20 years, subject to a final investment decision for the Narrabri project. According to Santos, Perdaman’s plant would be developed in parallel with the Narrabri project to use appraisal and early development gas.
“Hybrid power, a combination of gas-fired power generation integrated with renewable power generation will also be assessed to provide electricity to both the Narrabri gas project and the ammonium nitrate plant,” Santos said.
Santos CEO Kevin Gallagher said Santos has committed to develop the Narrabri project solely for the east coast domestic gas market.
"Narrabri gas will be very competitively-priced gas. Santos will bring to Narrabri our experience in Queensland where we have reduced connected well costs by a massive 84% since 2015. Keeping the cost of supply down is a very good way to keep gas prices down," Gallagher said. "The Narrabri gas project could produce enough gas to supply up to half NSW's needs.”
"It's also very important to us that the environment and water resources are protected, and NSW has very strong environmental regulation to ensure Narrabri can be developed safely and sustainably,” he said.
The Narrabri project is currently being assessed by the NSW Department of Planning ahead of a decision by the Independent Planning Commission.
The announcement of the deal comes just days after NSW Labor said it will not let the coalbed methane project go ahead if the party wins the upcoming elections. According to local media reports, party leader Michael Daley made the Labor stand clear during a meeting with Coonamble farmers over the weekend. The project has been mired in controversy as many activists say it poses a risk to the local environment. Santos has always denied these claims.
Perdaman chairman Vikas Rambal, said the company is pleased to enter the agreement with Santos. "The cheapest gas for manufacturing projects like ours is always going to be available close to the supply source so you don't have to pay for long-distance transport and unnecessary processing," Rambal said. "We will bring new competition, which is always good for prices, to the fertiliser market in NSW and that will be good for farmers in the region."