By HARRY CLARKE
THE CEO of the company poised to develop a major coal seam gas deposit near Narrabri in northern New South Wales is calling on the state government to prioritise the approvals process to bring the project online and alleviate the pressures causing high gas prices.
Santos boss Kevin Gallagher said there were about 20 management plans awaiting approval by NSW regulators before full scale drilling could proceed across the company’s 95,000ha tenement, which spans the vast Pilliga State Forest south of Narrabri and some adjacent farmland.
The company has approval to drill 850 wells which have the potential to produce 150 terajoules of gas per day.
All of the gas to be extracted from Narrabri has been committed to the domestic market.
“That is more than half of the gas that goes into the NSW domestic market today,” Gallagher (pictured below) told the Caller.
“More low-cost supply is always the best way to put downward pressure on prices and the cheapest gas supply will always be the gas on your doorstep because that reduces transport, storage and other handling costs.
“The NSW government and Santos need to carry out our respective obligations to get the project to a final investment decision as soon as possible,” he said.
“Santos is very keen to get Narrabri developed and we will try to exceed our base case of 2026 for first gas to southern domestic markets.”
As well as management plans, Santos also needs a future act determination from the Federal Court to satisfy native title obligations.
Another major hurdle is the approval of the pipelines needed to transport gas to southern markets. One is the Hunter Gas Pipeline which will run from Wallumbilla near Roma in Queensland to Newcastle.
The second is the APA Group’s Western Slopes Pipeline, which is planned to connect the Narrabri gas field to APA’s pipeline running to Sydney from Santos’s gas fields around Moomba in north eastern South Australia.
The Santos gas fields are already providing energy to the national grid, with 32 pilot wells having been drilled since the company acquired the asset in 2011.
Of the pilot wells, about 18 are currently operational and feeding gas to a 22MW power station outside the Narrabri township.
A water treatment plant is allowing water received during gas extraction to be used by a handful of neighbouring farmers. The salty coal seam gas water is stored in large sealed ponds before it undergoes a reverse osmosis process to make it suitable for agriculture.
Controversial fracking techniques to draw gas from underground are not used in the area and wells are drilled to between 400 metres and 1000 metres below the earth’s surface – well below the depths of aquifers used by the agricultural sector.
But despite assurances by Santos that its coal seam gas development will have “negligible” impact on groundwater, some farmers in the region are deeply concerned their bores will be affected.
Robyn King (pictured) has a large cropping property south of Mullaley and about 50km from the Pilliga State Forest, where pilot drilling has already taken place.
There are roughly 100 landholders located inside Santos’s tenement with whom the company will seek agreements to access property for drilling, but King said she was one of many farmers further afield who were worried about how underground depressurisation of the coal seam would impact bore water across the Liverpool Plains.
King referenced a Referral of proposed action report commission by Santos in 2014 which said “an assessment of the project indicates that the duration and wider geographic extent of depressurisation of groundwater head within the coal seams and adjacent strata will cause a significant impact to the groundwater resources of the Gunnedah-Oxley Basin”.
“However, due to the depth of the target coal seams, low hydraulic conductivity of the target strata and poor hydraulic continuity with the overlying strata, the overlying groundwater features of greater sensitivity (Pilliga Sandstone, alluvium) are highly unlikely to experience significant impact”.
King said: “What part of this equation do you ignore if you think that coal seam gas extraction won’t have a negative impact?”
“People who object to this industry have been labelled as ill-informed, leftist greenies, irrespective of their political association. It’s very hard, when you dismiss someone with a strong statement like that, to come back and be a voice that’s heard.
“It’s not just agriculture, it’s lots of towns, industries and tourism that depend on groundwater, and that’s to say nothing of food security.
“As the world predicts severe food shortages, we, the people of the Liverpool Plains, will not stand by and allow this precious food producing region to be ravaged by CSG extraction.”
King’s neighbour, fourth generation crop farmer Todd Finlay (pictured) said he was also concerned about the prospect of CSG activity impacting ground water in the region.
“My biggest concern is the (potential impacts on) land values and water quality,” he said.
“If the aquifers are damaged, that can’t be reversed. That’s the scariest thing for us. We can’t get the water to produce stock. We pull water out from under there to live on. That’s what got us through four years of drought. All we had was that water.”
In response to concerns raised by farmers, Santos CEO Kevin Gallagher pointed to findings by the Independent Planning Commission which said the project would comply with “minimal harm criteria” in the NSW Aquifer Interference Policy.
“Santos’s groundwater models were reviewed by some of Australia’s leading scientists through the independent Water Expert Panel and the Independent Expert Scientific Committee, who both found that the groundwater model was fit for purpose,” Gallagher said.
“The CSIRO reviewed the Santos model and described it as both “suited to assess the potential impacts on water in the area” and “state of the art”.
“This modelling indicates that the project will have a negligible impact on groundwater and existing water use.”