New information from pilot wells at Santos’ Narrabri operations is “highly encouraging”, and the number of wells needed to produce much needed gas for New South Wales could be reduced.

Santos General Manager of Energy NSW Peter Mitchley told the Resources and Energy Investment conference in Sydney that new appraisal data has delivered positive results that could significantly enhance the economics of the proposed Santos Narrabri Gas Project.

“We know there is an abundance of gas and the local geology is favourable,” Mr Mitchley said.

“As we continue to work the field and continue to study the reservoir engineering, we are anticipating that the well count, in other words the number of wells we have to drill to extract the natural gas, could reduce by about 20%.”

Santos is currently finalising the Environmental Impact Statement for the proposed Narrabri Gas Project that could supply up to 50% of NSW gas needs. Through the project Santos will directly employ more than 1200 people during construction and 200 people on an ongoing basis.

Mr Mitchley also told the conference that as Santos seeks to develop the Narrabri Gas Project, protection of water is a key priority.

“If you are a local resident and your livelihood depends on farming, water is your lifeblood. So extracting natural gas needs to be done in a way that doesn’t threaten that water,” he said.

Santos has developed a regional groundwater model to assess the impacts on groundwater from CSG activities in the Gunnedah Basin.

The model was peer reviewed by the CSIRO who concluded: “the regional groundwater MODFLOW model for the Gunnedah Basin can be considered state of the art and is suited to assess potential impacts of water extraction for coal seam gas depressurisation on the surface water and groundwater resources in the Gunnedah Basin district.”

“What the CSIRO conclusion confirms is that our groundwater model can accurately predict surface and groundwater impacts from coal seam gas activities in the Gunnedah Basin. This is a significant step forward,” Mr Mitchley said.

This finding builds on a range of existing studies that have concluded that coal seam gas would not impact water uses. The independent $4.5 million Namoi Catchment Water Study for example, found CSG developments far larger than Santos’ proposed Narrabri Gas Project, would have an insignificant impact on water sources across the catchment.

Mr Mitchley said Santos Narrabri operations are backed up with an extensive groundwater monitoring network that provides real time monitoring of groundwater across the project area.

“Ongoing monitoring is the tool by which we ensure that our activities do not impact water resources and the community, farmers and irrigators can be confident as a result of that monitoring,” Mr Mitchley said.

“If there was any question that we would impact water resources we would not go ahead with our project. Local farmers who rely on the water can have absolute confidence that as we develop the Narrabri Gas Project that water resources will not be affected.

“In summary this is a great project. Its geological setting means it is sustainable, will not have an impact on water and yet provide the benefits to the economy of more affordable gas and a sustainable and natural product that helps to compliment renewables.”