Santos Ltd has signed a non-binding memorandum of understanding (MoU) with the Narrabri Shire Council for supply from the Narrabri Gas Project.
“The MOU outlines Santos’ commitment to supply natural gas to businesses operating within the Northern NSW Inland Port, on the western outskirts of Narrabri, from project commencement”, the Australian company said in a press release.
“Under the proposed agreement, Santos would supply the Narrabri Shire Council with up to 3.2 PJ per year of competitively-priced natural gas for up to 10 years, subject to capacity of the Wilga Park Power Station lateral pipeline and Santos’ final investment decision for the project”.
Santos has said 100 percent of production from Narrabri would flow to the domestic market. It expects the project to supply up to half of New South Wales’ gas needs. The company plans to gradually develop 850 wells.
Narrabri appraisal wells already supply the Wilga Park power station, which generates power for the northwest New South Wales grid, according to Santos.
Santos managing director and chief executive Kevin Gallagher said, “We know from our experience in developing Queensland coal seam gas that Narrabri gas will be a very competitive source of domestic gas supply for the east coast market that is further advantaged by proximity to customers in NSW”.
“We are excited to partner with the Narrabri Shire Council to help attract businesses to the new industrial precinct with reliable, competitively-priced gas and electricity”, Gallagher added.
Earlier this month Santos said it had signed a non-binding MoU with Orica Ltd for a 10-year supply from the Narrabri project to the mining solutions provider’s manufacturing network on Australia’s east coast. The two agreed to negotiate for up to 15 petajoules a year.
“Santos and Orica will also explore decarbonization activities through Santos’ third-party carbon management business”, Santos said in a press release September 11.
Last month Santos said it had signed a non-binding MoU to supply ENGIE SA up to 20 PJ per year for 10 years from the Narrabri project. French utility ENGIE committed 100 percent of the purchase to Australia, according to Santos.
Santos has yet to make a FID (final investment decision) on the Narrabri project.
“Delays to bringing Narrabri gas to market have occurred as a result of a number of factors including government moratoriums, independent scientific reviews, delayed and lengthy approvals, legal appeals and native title processes”, Gallagher said in a statement August 4 announcing the MoU with ENGIE.
To contact the author, email jov.onsat@rigzone.com
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