Article by Ryan Cropp, courtesy of Financial Review
20.05.2025
Santos’ $3.6 billion Narrabri gas development will go ahead after a tribunal ruled the project’s importance to the nation’s energy reliability outweighed potential environmental and cultural heritage concerns.
The ruling by the Native Title Tribunal ends Santos’ decade-long fight to drill up to 850 wells and extract coal-seam gas in north-western New South Wales, which is also an important agricultural area for the state.
The 127-page ruling by the tribunal found that despite noting the project’s “serious” detrimental effect on climate change, it would have a “net public benefit” as long as all the gas produced was supplied to the increasingly constrained domestic market.
“When considering public interest, the panel placed significant weight on the project providing energy reliability if all the gas produced is made available to the domestic market as intended,” the tribunal said.
“The evidence in this matter has shown that if the leases are not granted, there will likely be a gap in the available supply of reliable, secure energy on Australia’s east coast, which would have significant short-to-medium-term detrimental impacts upon the wider community, including Gomeroi people.”
The local Gomeroi people had opposed the Narrabri development, claiming they had exclusive native title rights over the area and that the project’s emissions would worsen climate change, impacting their health, way of life and the land.
Native title recognises Indigenous rights and interests over certain parcels of land.
Santos, Australia’s second-largest gas producer, welcomed the decision as an “important step forward”.
“Narrabri gas will be lower-cost gas for NSW customers compared to gas imported from interstate or overseas, and that’s why this project is so important for NSW manufacturers, businesses, electricity generators and households,” it said.
Santos still requires planning approval for a pipeline connection to Australia’s east coast and has indicated it would make a final investment decision by this year.
The Narrabri project is often touted as a key initiative to ease long-forecasted gas shortages in Australia’s east coast market, which has been plagued by dwindling supplies, particularly in the southern states.
In March, the Australian Energy Market Operator warned of natural gas shortfalls by 2028 – three years later than previously forecast – and annual shortages from 2029 onwards unless private investment flows into import terminals, pipelines and new gas fields.
In 2020, the NSW Independent Planning Commission granted approval for Santos to drill 850 wells in northern NSW.
The IPC received over 23,000 submissions opposing the project, with key concerns including the risks the gas extraction could cause to the Great Artesian Basin and other aquifers that supply surrounding agricultural land.
Santos initiated the Native Title Tribunals’ intervention after the company and the Gomeroi people failed to reach an agreement under the Native Title Act.
Around 70 per cent of the project’s total area overlaps with an area known as the Pilliga, which is an important cultural landscape of the Gomeroi people.
After the tribunal found in Santos’ favour in December 2022, the Gomeroi lodged an appeal in the Federal Court.
The Federal Court overturned the decision in 2024 and ordered a reassessment of the Gomeroi people’s environmental concerns. It was sent back to the tribunal for a final determination.
The ruling has committed Santos to supplying 100 per cent of the gas produced at Narrabri to the domestic market, as well as strengthening Indigenous cultural heritage protections and implementing a ranger program in the Pilliga forest.
There was broad consensus between the experts for the Gomeroi people and Santos regarding climate science, the tribunal said. “Gomeroi’s expert and traditional owner evidence demonstrates that climate change will contribute to local and regional risks and impacts.
“It is not controversial that there is more than one source of greenhouse gas emissions, and more than one cause of global warming, and it would be an error for the tribunal to attribute every consequence of global warming to the proposed [Narrabri project].”
Santos shares have fallen by almost one-fifth over the past year, and were last trading at $6.37.