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August 11, 2022

Australia’s energy giant Santos buys gas pipeline to offset supply shortage

Santos has purchased a pipeline route to assist development of a gas project.

By Smruthi Nadig

Santos, Australia’s oil and gas giant, announced on Thursday that it has purchased Hunter Gas Pipeline that owns a permitted underground pipeline route. 

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 This would transport natural gas from Santos’proposed Narrabri project, which would supply the domestic market by mid-decade.

The country’s second-largest independent gas producer, Santos representatives said the company would collaborate with infrastructure developers and owners to construct the pipeline, which Hunter Gas Pipeline previously estimated would cost approximately $1.2bn to construct.

The Hunter Gas Pipeline company has already received planning permission for a pipeline connecting the Wallumbilla Gas Hub in southern Queensland to Newcastle through Narrabri. 

A Santos statement that the pipeline would allow the company to deliver gas to the domestic market if planning officials allowed a short link.

Santos has requested government permission to develop its natural gas deposits in the Narrabri region of northwest New South Wales (NSW). Santos’ Narrabri Gas Project could provide up to half of NSW consumers with natural gas, bringing significant economic advantages to Narrabri and the region.

Gas from the project will be delivered to the NSW market via a pipeline that connects to the existing Moomba-Sydney pipeline. APA Group will build and own the pipeline, subject to additional clearances. The pipeline route has not yet been determined.

According to Hunter’s website, the Hunter Gas Pipeline has been planning clearance for an 883 km (550 miles) pipeline from Queensland’s Wallumbilla gas supply centre to NSW.

“In our view, the acquisition highlights Santos is keen to see its Narrabri project move forward which is currently valued at nil by the market and would solve a large part of NSW’s current gas needs,” Adam Martin, an analyst at Morgan Stanley told Reuters.

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