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Planning Department says Santos Narrabri project will not reduce gas price

The NSW Planning Department’s director has contradicted Santos over the impact its unpopular Narrabri gasfield would have on gas prices in the first day of the Independent Planning Commission’s public hearings into the project.

The Department’s representative David Kitto, an Executive Director of Resource Assessments, told the IPC this morning (10:21:29, password: lockthegate) that “no one is saying and we are certainly not saying in our assessment that the Narrabri gas project will reduce gas prices”.

Incidentally, that’s exactly what Santos argued in the media this morning.

Lock the Gate Alliance NSW spokesperson Georgina Woods said Santos’ gasfield would do nothing to bring down the price of gas in NSW or further afield.

“Santos, along with Origin Energy, and Shell, are the architects of the gas price crisis in this country because they built the LNG export terminals in Gladstone and locked in long term fixed price contracts with customers,” she said.

“Australia is awash with gas - we have been, at various times over the last year and a half, the world’s biggest exporter of LNG. 

“But thanks to companies like Santos, that means nothing for local manufacturers, who still face high prices due to the export contracts in place.”

Ms Woods said publicly available departmental documents showed gas prices needed to remain high for the project to be economically viable for Santos.

Santos’ economic assessment of the gasfield, prepared in 2016, estimated a constant gas price of $8.70 per GJ, including the cost of transport to Sydney.

Modelling done for the EIS indicated that if the price were 30% lower, at $6.09 per GJ, the gasfield would have a net negative economic contribution (Page 39 of Appendix UI and Table 4, page 15, of Appendix H2 - B in the Assessment Report).

“Santos isn’t a charity,” Ms Woods said.

“It wants high prices so it can make a profit. It has no interest in supplying cheap gas to business in NSW or anywhere else. If we want sustainable industry, we need to plan for renewable energy to replace costly and damaging gas.”

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