The company has been under pressure from anti-fossil fuel activists which claim Narrabri is uneconomic and would not put a dent in the state’s gas shortage. NSW’s historical gas supply contracts effectively expire in 2015-16.

The Institute of Energy Economics and Financial Analysis even said that the memorandum of understanding Santos signed last February with the NSW government to ensure Narrabri would be assessed within specific timeframes was not legally binding and that there would be “great pressure” to maximise gas prices in other markets.

“Failing to develop the reserves in the Narrabri area will result in a less secure energy supply as well as much higher and more volatile natural gas prices for NSW families and businesses in the future,” Santos Eastern Australia vice president James Baulderstone said.

He added that the project would be carried out with comprehensive community consultation and provide significant benefits to both regional communities and the state’s economy.

“Santos is committed to undertaking the Narrabri gas project in a safe and sustainable manner ensuring the environment is protected for the people of NSW,” Baulderstone added.

Santos said that for the only Australian mainland state that did not have a material natural gas industry, Narrabri project 500km northwest of Sydney could deliver up to half NSW’s needs, flowing through a dedicated pipeline connecting to the existing Moomba to Sydney Pipeline.

While NSW imports 97% of its gas requirements, Narrabri alone would create over 1000 jobs, inject $160 million into a Regional Community Benefit Fund and deliver $1.6 billion in royalties to the state.

Baulderstone said the gas in its NSW licences was vital to the future economic viability of domestic manufacturing and in putting downward pressure on the coast of energy for NSW families – a claim activists have denied.

“NSW has the ability to become self-sufficient in its natural gas requirements for decades if it takes the opportunity to develop the state’s existing natural gas reserves,” he said.

The company also targeted the hype surrounding the widely accepted view that the start-up of Queensland’s LNG mega-projects would link the east coast gas market to international pricing.

“The notion that there is a single global price for natural gas is a furphy,” Santos said.

“The price paid by Asian countries varies considerably. Even at a forecast wholesale gas price range of $6-9/ gigajoule, businesses in eastern Australia will continue to benefit from one of the cheapest gas prices in the region.”