Santos commits to selling into NSW

SANTOS has confirmed its intention to sell gas from its yet-to-be-developed Narrabri coal seam gas project in New South Wales to the state’s domestic market, quashing fears that it could simply be piped to its Gladstone LNG project in Queensland.

James McGrath

It told EnergyNews this morning that it had committed to using gas from Narrabri, should it be developed, in the NSW domestic market.

Many of those opposed to Santos’ project pointed to the increasing demand from the GLNG project and its stated desire to secure more third party deals for the project as evidence that Santos would bypass the NSW market in favour of the more lucrative LNG market.

However, with the recent withdrawals of Metgasco and Dart Energy from the state, fears that NSW would be left without an indigenous gas supply have been stoked.

It is also feared that sources from other states could dry up as the LNG projects move into first production, starting in 2015.

Meanwhile, Santos also confirmed media reports that it was in discussions with potential consumers about possibly entering a joint venture with Santos covering the Narrabri project.

It is unclear whether such a deal would include an offtake agreement at this stage.

Santos eastern Australia vice president James Baulderstone is due to give a speech in Sydney today on the issue.