Santos is seeking government approval to develop natural gas reserves in the Narrabri area in north west New South Wales.
Santos’ Narrabri Gas Project could supply NSW homes, small businesses, major industries and electricity generators with up to half the state’s natural gas needs and bring substantial economic benefits to Narrabri and the region. The gas from the Project will be supplied to the NSW market via a dedicated pipeline heading south from Narrabri.
Explore further: Narrabri Gas Project
We are currently preparing the Environmental Impact Statement for the Project, which we plan to submit to the Government later this year for assessment. The Government will take several months to assess the EIS. While the EIS is being prepared we are continuing with exploration and appraisal activities to confirm the viability of the Narrabri Gas Project.
We are seeking approval from the Government for 850 wells to be located over 425 well-pad sites. These will be developed during the 20-25 year life of the Project.
The wells will be located within the Project area which covers 98,000 hectares in and around the Pilliga.
We anticipate operations on less than one percent of that area. The majority of wells will be in State Forest, in an area designated by the Government for logging, extractive industries (like natural gas extraction) and other commercial activities. The remainder will be on private land subject to agreement with the landholders. We already have some agreements in place with landholders in close proximity to the Pilliga.
For further details about the Project area click on map below
A pipeline will be constructed running south from our Narrabri operations to connect into the Moomba-Sydney pipeline which carries natural gas from the gasfields in South Australia into NSW, and then on to Sydney.
The exact pipeline route, where and how it will link into the Moomba-Sydney line, hasn’t yet been determined.
We want the regional communities who host our activities to benefit from working with us. So, as well as benefits such as local jobs, business opportunities and land use payments to landholders, Santos will establish a Regional Community Benefit Fund when the Project reaches production. The Fund will be equivalent to 5% of our total royalty payments that will then be matched by the NSW Government. We estimate the Fund will provide $160 million over the life of the Project to fund projects, programs and infrastructure in the Narrabri region.
We expect there will be 1200 jobs during construction and up to 200 ongoing positions. There will also be jobs created with local contractors and suppliers working on the Project as well as indirect jobs in various sectors that provide local services and cater for workers and their families.
We want to ensure local firms are given every opportunity to be involved with our work. Santos already uses local contractors and suppliers whenever possible and this practice will continue if the project goes ahead. We work with local suppliers and contractors to assist them to put in place appropriate systems, policies and processes so they are compliant with our Contractor and Supplier Management Standards.
Find out more: Business Opportunities
As well as providing a much-needed source of natural gas, the Narrabri Gas Project is expected to contribute over $1.6 billion in royalty payments to the NSW Government to help deliver hospitals, schools, roads, police services, and other state-based infrastructure and public services.
Natural gas is a fuel that is made up mainly of methane. It is found in several different types of rocks including sandstone and in coal seams like those found in the Narrabri Project area.
Natural gas is used to generate electricity in our homes and industries, as well as, for cooking and heating. It is an essential fuel in various industrial processes, including making bricks, glass, steel, plastics, paint, fabrics, fertilisers and many other products. Compressed natural gas can also be used to power vehicles such as many of Australia’s bus fleets.
Coal seam gas is simply natural gas that comes from coal seams.
Natural gas and water are held in the coal seam by pressure. To extract the natural gas, a well is drilled into the coal seam. The water is extracted, releasing the pressure within the coal seam, allowing the gas to flow up through the well to the surface.
Explore further: Drilling with Care fact sheet
All landholders within our proposed Project area were contacted by our team late last year when we began discussing the scope of the planned project. Those landholders were invited to information sessions and receive regular updates from us.
View: Map of Project Area
If a landholder is keen to work with Santos, a land access agreement will be negotiated and compensation arrangements put in place.
A Farm Management Plan will also be developed to coordinate activities and minimise impact on landholder’s business productivity and lifestyle. Natural gas extraction can co-exist with other land uses such as agriculture because of the relatively small amount of land used. There is also some flexibility with where activities can be situated on a property; allowing our operations to work in harmony with the landholder’s agricultural business.
Click here: Working with Landholders fact sheet
Landholders involved in our exploration program will be compensated for the value of the land being utilised by our operations and will receive an annual fee for this service. When the Narrabri Gas Project reaches production, landholders will share in a compensation pool, with income proportionate to the amount of their land being utilised and the performance of the field.
Click here: Working with Landholders fact sheet
We have been very clear that we will only drill on private land with the agreement of the landholder. Earlier this year, we signed the Agreed Principles of Land Access with NSW Farmers, Cotton Australia, the NSW Irrigators Council and fellow energy company AGL, which reinforced this commitment.
View on NSW Farmers’ Site: Agreed Principles of Land Access
The Gomeroi People’s Native Title claim covers the parts of the Pilliga in which we are seeking to work. We meet regularly with the Gomeroi registered claimants and are working towards an agreement with them. We meet regularly with the Local Area Land Councils included in the project area and have asked for Aboriginal parties to register their interest in being involved in the cultural heritage work needed for the Project’s Environmental Impact Statement (EIS). We will work with the Aboriginal community to put initiatives in place that will allow them to benefit from our work in the Narrabri area.
About one hectare of cleared area is required when drilling a well, so that the necessary equipment can be put in place. When drilling is complete, we begin to reduce the cleared area around each well and rehabilitate surplus access tracks.
When a well is no longer producing gas it is decommissioned. The surface wellhead and equipment is removed and the well is completely sealed with pressure-tested cement plugs from top to bottom. The cement used is formulated to be stronger than the layers of rock it passes through and is designed not to degrade over time to ensure underground formations remain isolated. The site is then completely rehabilitated and the land can be returned to its previous use.
Over the life of the Project, we will progressively rehabilitate areas as wells come on and off line, to minimise the total area cleared at any one time.
Natural gas and water are held in the coal seams by pressure. To extract natural gas from coal seams, the water is extracted from the seam. This releases the pressure allowing the natural gas to flow up through the well to the surface.
The water extracted is not the same water accessed by agriculture and community bores and is also not taken from the Great Artesian Basin. In the Narrabri area it comes from the coal seams located 500 to 1000 metres below the surface.
The water extracted in the Narrabri area is about half as salty as seawater; too salty for stock use or irrigation unless it is treated.
Before we take any water, we must have a Water Access Licence in place; just like other users. This water must be obtained, and paid for, from the market. Our water extraction is also assessed against the Government’s Aquifer Interference Policy.
Currently water is being transferred from the field via an underground flow-line to newly constructed double-lined ponds at our Leewood facility, adjacent to the Pilliga.
We will soon be seeking Government approval for phase two of work at Leewood: construction of a water treatment facility to handle water from our exploration program.
Once treated and desalinated, water from the exploration program will be used to irrigate sections of the Leewood property and for activities such as dust suppression and construction use.
Santos estimates about 80% of the water extracted as part of the Narrabri Gas Project will be able to be reused following treatment.
About 80% of the water we extract will be able to be reused following desalination. The remainder is brine with a high salt content. Phase 3 of work at our Leewood facility will include investigations into salt handling technologies and further treatment of the brine. There may be commercial opportunities for the bicarbonate found in the water extracted in the Narrabri area. If not feasible, the brine will be removed to waste treatment and containment facilities regulated by the NSW EPA.
We estimate on average 50 tonnes (about two truckloads) of salt per day will be produced.
Because of the depths at which we are working, we don’t anticipate any impact on local bores but, as standard practice, we offer to monitor the bores of landholders within a 2km radius of our operations. This gives the landholders added confidence our work isn’t impacting their water.
The wells contain layers of steel and cement that isolate the coal seams we target from the geologic layers and aquifers above.
The steel casing which lines the wells is specially designed to withstand operational pressures during drilling operations, testing and production and resist corrosive subsurface conditions. The steel casing is also protected by specially formulated cement designed to be as strong as the rock into which the well is drilled.
Click here: Drilling with Care fact sheet
Our wells are drilled to the highest industry standards to ensure there are no integrity issues and layers of steel casing and cement seal off the well from the shallow aquifers as we drill down to the coal seams.
The Well integrity Code of Practice requires Santos to keep and maintain extensive records of each well’s construction and its on-going monitoring and maintenance. These records must be lodged with, and reviewed by, the petroleum regulator each year.
The coal seams we are targeting in the Narrabri area are between 500 to 1000m below the surface. They are separated from the shallow aquifers used by farmers and the community by hundreds of metres. When we drill through the aquifers they are isolated behind single or double layers of steel and pressure tested cement, which prevents cross-contamination.
Click here: Protecting Local Aquifers fact sheet
The shallow aquifers, (including the Pilliga sandstone, which is an extension of the Great Artesian Basin), generally lie between 5 – 300 metres below the surface in the Project area. In the Narrabri area, the coal seams we are targeting typically lie between 500 – 1000 metres underground.
There are layers of solid rock between the Pilliga sandstone and the coal seams. These rock layers are known as aquitards and act as barriers to the water travelling up and down.
This geology, along with existing information from previous research on the area in which we are working, gives us confidence we will not impact local water resources.
We are establishing a network of shallow and deep aquifer monitoring bores around our project area. Data from these wells will give the community added confidence our work is not impacting the aquifers. Water quality and water level data from these wells can be accessed by the community via Santos’ water portal.
Explore further: Santos Water Portal
The Namoi Catchment Water Study, carried out by independent experts and commissioned by the Government, showed no harmful impacts on groundwater from natural gas developments on a much larger scale than we are proposing with the Narrabri Gas Project.
The study predicted there would be a drawdown of less than 0.5m over 90 years – which is within the range of existing seasonal variations.
Click here: Final Report Namoi Catchment Water Study
Hydraulic fracture stimulation (commonly referred to as “fraccing” or “fracking”) is a technique used to improve the flow of natural gas from a well. Water, sand and a small amount of chemicals are pumped into a well and down into the coal seam at high pressure to open up fractures in the coal. The sand remains in the fractures to hold them open, allowing more gas to flow, and the fluid is pumped back out of the well. The technique has been safely used throughout Australia for over 40 years.
Santos has no plans to use fracking as part of the Narrabri Gas Project.
Due to the geology of the coals in the Project area, we do not believe hydraulic fracture stimulation will increase gas flows in the coal seams we are targeting.
In the unlikely event future geologic data did indicate that significant benefits would result from hydraulic fracture stimulation then additional government approvals and associated community consultation would be required.
The Pilliga covers an area of 500,000 hectares. We expect our operations to be located on about 500 hectares of the Pilliga.
The area of the Pilliga in which we will be operating, has been designated by the Government as suitable for “forestry, recreation and mineral extraction”.
This part of the Pilliga has a long history as a working forest, and vegetation has been disturbed by farming, fires and logging. Throughout the 500,000 hectares of the Pilliga there are already over 5,000km of roads, access tracks and easements and we will use these existing tracks where possible to minimise any clearing.
Click here: Working in the Pilliga fact sheet
View: Map of Project Area
Since 2002, twenty five ecological surveys, totalling more than 3,500 person hours, have been undertaken in the north-east Pilliga as part of natural gas exploration. These surveys assessed the flora and fauna in that area and have given us a significant ecological knowledge of the area. We are continuing to undertake additional flora and fauna studies targeting key species and the information gathered will feed into the Environmental Impact Statement for the Project and be provided to the Office of Environment and Heritage for its database.
The natural gas industry in NSW is one of the most highly regulated industries in Australia. Over the last two years, both the NSW and Commonwealth Governments have put in place a range of new measures designed to build on the already extensive regulation. A number of State and Commonwealth agencies oversee the industry, as well as the Commonwealth Independent Expert Scientific Committee.
Approvals are required from the relevant New South Wales State Government agencies. In many cases, separate approval is also required from the Commonwealth Government, and can involve assessment by an independent expert scientific committee. If approval is granted, it will include numerous conditions of consent.
The Narrabri Gas Project will require both NSW and Commonwealth Government approval.
All coal seam gas activities must have an Environmental Protection Licence (EPL) in place, in addition to any environmental approvals that must be obtained. Just as with other industries, EPLs include numerous conditions relating to ongoing environmental protection and oversight of the operation. The Environment Protection Authority is responsible for regulating EPLs.
Explore further: NSW Resources and Energy
We have shopfronts in the main streets of Narrabri and Gunnedah to give the community ease of access to our team and information about our work.
We hold regular information sessions, provide fortnightly updates about our activities in the Narrabri Courier and give presentations on our work to interested community and business groups.
All regulatory approval documents are available on our website and we hold regular site tours to our field areas so people can have a firsthand look at our operations.
Interested in the next site tour? Click here for details: Events
The Narrabri Shire Community Consultative Committee is made up of members from the local community and meets regularly to discuss our work in detail. It provides a forum for questions and concerns to be raised on behalf of the local community and information provided back to the community.
Find out more: Community Consultative Committee