Santos Secures Preliminary Deal for Narrabri Gas Purchase by Orica

Santos Ltd said Thursday it had signed a non-binding memorandum of understanding (MoU) with Orica Ltd for the 10-year supply of natural gas from Santos’ Narrabri project to the mining solutions provider’s manufacturing network on Australia’s east coast.

The Australian companies agreed to negotiate for up to 15 petajoules a year from the coal seam gas project in New South Wales.

“Santos and Orica will also explore decarbonization activities through Santos’ third-party carbon management business”, Santos said in a statement on its website.

Santos managing director and chief executive Kevin Gallagher commented, “There is overwhelming demand for Narrabri gas and Santos is looking to execute foundation contracts as soon as possible to support development once regulatory and native title processes are concluded”.

“Narrabri gas will be a very competitive source of domestic gas supply for the east coast market”, Gallagher added.

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 electricity for the northwest New South Wales grid, according to Santos.

Last month Santos said it had signed a non-binding MoU to supply ENGIE SA up to 20 petajoules 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.

ENGIE and Santos also committed to “exploring decarbonization activities through Santos’ third-party carbon management business, specifically via the proposed Moomba phase II carbon capture and storage project”, Santos said.

Moomba CCS started operations October 2024. Phase I has a declared capacity of up to 1.7 million metric tons a year of carbon dioxide equivalent. Moomba CCS injects into depleted reservoirs near the Moomba oil and gas gathering and processing complex, which serves the onshore Cooper and Eromanga basins, according to Santos.

In 2023 two Japanese companies came onboard after Australia passed legislation that would allow foreign companies to ship CO2 via Australian waters. “The signing of a memorandum of understanding between Santos, JX Nippon Oil & Gas Exploration Corp and ENEOS Corp paves the way for a joint feasibility study that will evaluate the potential to capture, transport and sequester emissions from Japan, supporting expansion of the Moomba CCS project”, Santos said December 18, 2023.

In a statement June 11, 2025, Santos said, “Phase II of the Moomba CCS project aims to utilize these depleted reservoirs to store third-party emissions from domestic and Asian customers to create a commercial carbon management services business to help these customers build more sustainable business models and to achieve their own emission reduction targets”.

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