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Santos backs domestic gas over import terminals

Import terminals will not effectively lower domestic gas prices, according to Santos Managing Director and Chief Executive Kevin Gallagher.

Santos this week announced a new natural gas flowline, connecting gas from the Narrabri Gas Project to a New South Wales power station in order to increase electricity generation capacity.

Mr Gallagher said this was the kind of domestic resource that would help lower gas prices.

“The Australian Competition and Consumer Commission has said gas customers in southern markets pay $2 to $4 per gigajoule more than they would if gas was developed locally and didn’t have to come all the way from Queensland or South Australia,” he said.

“Import terminals are not the answer. The only way to have an energy advantage over other countries is to put in place strict environmental standards so you can safely produce as much of your own energy resources as you can at as low a price as you can.”

The new flowline from the Dewhurst South natural gas wells will allow Santos to increase the electricity generating capacity of the Wilga Park power station from 12 MW to 16 MW.

This means the Narrabri gas supplied to the power station will be enough to generate electricity for approximately 23,000 households in the area.

A range of import terminals are in development on Australia’s east coast, including endeavours from AGL Energy and the Andrew Forrest-led Australian Industrial Energy, but Mr Gallagher said it was domestic gas, not import terminals, that would benefit the industry in Australia.

“Importing gas will lead to higher prices or shortages, particularly when LNG demand in Asia is high,” he said.

“It is a certain way of ensuring that at some time in the future foreign suppliers would have a gun to the head of Australian manufacturers.

“The Narrabri Gas Project is currently being assessed by the NSW Department of Planning ahead of a decision of the NSW Independent Planning Commission.

“One hundred per cent of Narrabri gas would go into the domestic market, potentially supplying up to half of NSW natural gas demand.

“It makes good environmental sense to use this gas beneficially to generate power for local communities and reduce waste and emissions.”

For more information visit the Santos website.

If you have company news you would like featured in The Australian Pipeliner contact Assistant Editor David Convery at dconvery@gs-press.com.au

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