ENERGY giant Santos has already spent in excess of $1 billion pursuing plans to establish a coal seam gas field in Narrabri.
And that outlay could potentially double before the company, if it even secures approval, gets the first gas to the domestic market.
This level of investment in an industry still regarded with considerable suspicion clearly indicates Santos’s commitment to the project.
But it is easy to see why when you consider there is reportedly enough methane hidden within Narrabri’s coal seams to meet NSW’s demand for the next decade.
“Santos has invested more than $1 billion in this project, so it is a significant amount of money,” Santos Energy NSW boss Peter Mitchley told The Leader last week.
“But we know there is a significant volume of gas in the Narrabri region. Let’s remember that third party independent reserve auditors have said there is more than enough gas in Narrabri to provide all of NSW’s gas needs for more than 10 years.
“So we know the gas is there and, yes, we’ve spent quite a lot of money in trying to bring that gas to market.”
Santos is proposing to drill up to 850 wells in and around the Pilliga State Forest to extract up to 200 terajoules of gas per day.
It says the project will create 1200 jobs in the construction phase and about 200 permanent positions in Narrabri as production commences.
While Santos maintains the industry is “profoundly safe”, an anti-coal seam gas campaign run by farming and environment groups has gained traction in the financial world.
Last month, global financial services firm Credit Suisse cited “widespread organised opposition” as posing the “most significant risk” to the project.
The real test for Santos will come, however, when its long-awaited environmental impact statement (EIS) lands with the state government.
The document – tipped to be formidable in both size and detail – will outline what effects the project will have on the environment and how the company plans to mitigate them.
Santos’s failure to meet its self-imposed deadline to submit the EIS by June 30, as outlined in a memorandum of understanding signed with the government in February, prompted speculation the project had hit a glitch.
But Mr Mitchley said there was a perfectly innocent explanation for the delay; the director-general’s requirements (DGRs), which directs Santos on what to address in the EIS, were not supplied in time.
“The EIS effectively answers to the DGRs and the fact of the matter is that we only got the DGRs out of the government in the last couple of weeks,” he said.
“We should have got the DGRs sometime in April. Clearly we can’t submit the EIS before we get the DGRs.”
Mr Mitchley said the EIS would take a further three to four months to complete, meaning it would be lodged before the year’s end.