Project Profile
Value: US$2 billion
Location: Petroleum Exploration Licence Area 238 (PEL 238) and Petroleum Assessment Lease Area 2 (PAL 2), Narrabri area, north west New South Wales, Australia
Area: 950 square km
Reserves: 2.6 tcf resources of natural gas (out of which 1 tcf are classified as 2P proven and probable reserves)
Production: 200 terajoules of natural gas per day
Start-up year: by 2018
Santos proposes to develop its coal seam gas reserves in the Narrabri area in north west New South Wales to provide a much needed source of natural gas for the State. The project is called Narrabri Gas Project. Natural gas from coal seams now accounts for around 90 per cent of Queensland’s gas supply and 30 per cent of the east coast gas demand. NSW currently receives more than 95 per cent of its natural gas from interstate. The long term gas contracts which have supplied gas to NSW in the past will expire over the next two to three years. This coincides with the commencement of liquefied natural gas (LNG) exports from Queensland which will see annual gas demand triple and the other states look to use their gas for their own economic benefit.
Santos’ Narrabri Gas Project could supply NSW homes, small businesses, major industries and electricity generators with almost half the State\'s natural gas needs and bring substantial economic benefits to Narrabri and the region. The Project area covers around 98,000 hectares. The proposed field operations will take up less than one per cent of the Project area and those located in the Pilliga will be focused in an area specifically zoned by the Government for natural gas development. The Project could produce 200 terajoules of natural gas per day, equivalent to about half of NSW’s current gas demand. This gas will supply the NSW market via a new pipeline connection running south from Narrabri
The Project could have substantial long term benefits for the local Narrabri area, as well as the regional and NSW economy, employing 1,200 people during the construction phase, 200 people during the operational phase and contributing more than US$1.6 billion in royalty payments to the State. The Project will be subject to a rigorous State and Commonwealth Governments assessment and approvals process to ensure impact has been assessed and mitigated. Santos’ exploration and appraisal program will be carried out in and around the Pilliga, near Narrabri. Activities will be contained within Petroleum Exploration Licence Area 238 (PEL 238) and Petroleum Assessment Lease Area 2 (PAL 2). The program is designed to gather further information on gas reserves in the area, gas composition and flow rates. It will also allow us to gain additional technical information on the drilling and operation of lateral wells within numerous coal seams.
The exploration program includes the drilling of 15 exploration and appraisal (or pilot) wells and one core hole. It also includes restarting existing pilots that have been shut-in since Santos took over the Narrabri operations in November 2011. All exploration work requires government approvals, with the assessment process determined by the scope and type of work. The project includes a pipeline buried at least 750 millimetres below ground. In the New South Wales, Santos declared 2.6 trillion cubic feet (tcf) resources of natural gas out of which 1 tcf are classified as 2P (proven and probable) reserves. In February 2014, Santos and the NSW Government signed a memorandum of understanding (MOU) for the gas supply to be delivered from the Narrabri Gas Project recognized as a Strategic Energy Project. Located approximately 30 kilometres southwest of Narrabri, the project area will cover 98,000 hectares along the Pilliga forest. In addition the program of decommissioning of the production wells and site rehabilitation has been fully integrated in the Narrabri Gas Project. Estimated to require US$2 billion capital expenditure, Santos Narrabri Coal Bed Methane project should include:
- Gas field drilling and production wells
- Gas and water gathering systems
- In-field compression
- Gas central processing facility (CPF)
- Water treatment and recycling facilities
- Power generation plant
- Power distribution network and utilities
The gas central processing facilities and the water treatment plant will be located at the Leewood property. In addition to the upstream part of the Narrabri CBM exploration and production project, Santos is planning to link its Narrabri Gas Project with the Eastern Australia pipelines distribution system through a gas trunkline project. This export pipeline project will be handled as a separated project. In the meantime Santos and its Partner EnergyAustralia are expecting to receive all the regulatory approvals along 2015 in order to start the construction of the Narrabri Gas Project in 2016 for the first delivery of the coal bed methane to New South Wales domestic market by 2018.
Operators:
Santos: Operator with 100% interest