Santos reclassifies Narrabri coal seam gas project as 'non-core' asset, calls to buy back exploration licence

In a statement to shareholders, Santos left Narrabri out of its five core projects, placing in a group of secondary assets which will operated under a “sweat or exit” strategy to “maximise value”.

However, Santos maintains the Narrabri project is a “strategically important” asset.

“Santos is continuing to progress the approval processes and will submit the Environmental Impact Statement for the project in the near future,” a company spokesperson said.

NSW Greens energy and resources spokesperson Jeremy Buckingham said the announcement should prompt the government to cancel the company’s exploration licence.

“It’s clear that Santos has little interest in developing the Narrabri coal seam gas project and are likely to try to sell it off,” Mr Buckingham said.

“It’s time for the government to end the uncertainty and put this project out of its misery by cancelling the licence.

“It’s now been almost three years since the Narrabri project was given Strategic Energy Project status to fast track it through the planning system.

“There is still no Environmental Impact Statement lodged and now the company has said they intend to spin it off and concentrate on other conventional assets.”

Yes2Gas spokeswoman Louise Tout said calls for the licence to be sold or suggestions Santos was looking to sell the project were “an overreaction”.

“We’ve still got every faith in Santos’ commitment to Narrabri,” Ms Tout told The Leader.

“It’s still a good viable project, that’s not just good for the local town but good for the state.”

A spokesman for Energy Minister Anthony Roberts said the government understood Santos had not changed its view that the Narrabri project was “still an important strategic opportunity”.

“How Santos organises their corporate activities is a matter for the company,” he said.

The government was commitment to its new Strategic Release Framework in 2017, the spokesman said.

Santos’ non-core assets, which also include Vietnamese and Indonesian projects, will be run as a “standalone low-cost” business.