Too high a price to pay

Read the expert report by Pegasus Economics exposing the fact that the Narrabri Gas Project will do nothing to bring down gas prices in NSW and is not needed.  

This damning October 2019 report reveals the extent of Santos' involvement in creating the high gas prices and gas market turmoil that is costing manufacturing jobs.

The economics report shows that:

  • Narrabri gas would be far more expensive than gas produced in the Eastern Gas Region at about $7.40/GJ, with pipeline costs increasing that to $9-9.40/GJ. 
  • The average cost of production in the Eastern Gas Region is $2.91/GJ and the most expensive is $4.90/GJ from the Otway Basin in Victoria.
  • This new report estimates the contingent resources of the Narrabri Gas Project amount to roughly half of one year's production on the east coast (1,883PJ last year).
  • At best, annual production at Narrabri might be 70PJ per annum, which is 3.7% of east coast gas production – certainly not enough to have any effect on price.
  • Renewable energy is rapidly reducing in cost and demand for gas is already falling dramatically in NSW as alternatives grow.

In addition, the report reveals that Santos created the gas crisis and certainly won’t fix it:

  • Santos caused the gas price crisis when it decided to build two gas processing trains at its Gladstone export terminal when it only had enough gas to fully support one.
  • To meet this shortfall, Santos has diverted substantial volumes of gas from domestic users to satisfy their export contracts.
  • Santos wrongly claimed in its EIS that its Queensland export terminal would not impact Australia’s domestic gas supply or price, when it has in fact driven the gas crisis.

Download the full report here.