New South Wales government cuts areas available for gas exploration by 77%

Aug. 2, 2021

Large areas of northwest New South Wales have been placed off-limits for gas exploration under a new State government plan.

The government’s “Future of Gas Statement” released July 21 by NSW Minister for Resources, John Barilaro, carves out large areas from Moree in the north to Coonamble and Gilgandra in the central west and Mudgee in the south as no-go zones for gas development. In total, the land available for gas exploration will be reduced by 77% on present levels.

Barilaro said the only active petroleum licences to remain will be in the Narrabri and Liverpool Plains region—in other words, permits that contain and support Santos Ltd.’s proposed Narrabri coal seam gas project.

Twelve expired or dormant licences (zombie permits) that cover about 55,000 sq km of land will be abolished, he said, adding that new areas earmarked earlier around Wilcannia and Broken Hill in the west of the State have also been ruled out for exploration.

The Narrabri project was granted development approval in September 2020 but awaits the outcome of an appeal on environmental grounds before it can proceed.

Santos has said that Narrabri production will be totally dedicated to the domestic gas market, but with no further exploration allowed, New South Wales will have to rely on interstate gas imports plus LNG imports from overseas to ensure ongoing security of supply.

The move bodes well for the two proposed LNG import terminals on the NSW coast. The most advanced of these is the Squadron Energy venture, backed by mining magnate Andrew Forrest, at Port Kembla south of Sydney. The other has been proposed by a private Korean group for Newcastle to the north of Sydney.