Narrabri Gas Project: Can Santos unlock new gas supplies for Australia’s East Coast?

The Narrabri Gas Project, operated by Santos Limited, is a major coal seam gas (CSG) development located in the Gunnedah Basin in northwestern New South Wales, Australia. Spanning over 95,000 hectares in the ecologically sensitive Pilliga Forest, the proposed project is seen as a critical response to looming natural gas shortages along Australia’s east coast. After more than a decade of cultural opposition, environmental scrutiny, and legal delays, Santos has now received the regulatory clearances required to proceed toward a final investment decision.

Where Is the Narrabri Gas Project and Why Is It Important for Australia?

The Narrabri Gas Project is situated near the town of Narrabri, approximately 500 kilometres northwest of Sydney. The site lies in a biodiversity hotspot—part of the Pilliga Forest—positioned above the Great Artesian Basin, one of Australia’s key underground water reserves. Initially identified more than ten years ago, the project aims to extract coal seam gas to help mitigate forecasted energy shortfalls across New South Wales and neighbouring states.

According to the Australian Energy Market Operator, gas demand on the east coast could outstrip supply by 2029. With the potential to deliver up to 200 terajoules (TJ) of gas per day, Narrabri could meet up to 50% of New South Wales’ current demand—making it one of the most strategically important undeveloped onshore gas assets in the country.

Who Operates the Narrabri Gas Project and What Is the Ownership Structure?

As of 2025, Santos Limited holds a 100% ownership stake in the Narrabri Gas Project and is responsible for its development, operation, and compliance. Headquartered in Adelaide, Santos is among Australia’s largest oil and gas producers and has invested over A$1.5 billion into Narrabri to date.

The project has long been opposed by the Gomeroi people, the traditional custodians of the land, who argue that the development threatens culturally significant areas within the Pilliga Forest. However, in a landmark decision issued in May 2025, the National Native Title Tribunal ruled that the public interest in securing future domestic gas supply outweighed cultural objections—provided that Santos implements specific heritage and environmental safeguards.

What Is the Gas Output Capacity of the Narrabri Project?

Santos plans to drill up to 850 wells within the project area, with targeted production levels of up to 200 terajoules of gas per day. All gas extracted from the Narrabri Gas Project is earmarked exclusively for the Australian domestic market.

While Santos has not publicly disclosed total proven and probable reserves, independent assessments suggest the Gunnedah Basin contains substantial gas-in-place volumes. If developed as proposed, the Narrabri Gas Project could deliver steady production for more than 20 years, significantly strengthening the long-term gas security of New South Wales.

How Will Narrabri Gas Reach Australia’s East Coast Markets?

The project’s commercial viability hinges on pipeline connectivity. Santos plans to construct the Narrabri Lateral Pipeline, a new spur that will link the production site to the existing Hunter Gas Pipeline. The Hunter pipeline spans over 800 kilometres, providing a route to transport gas to industrial and residential consumers along the east coast.

Development of the Narrabri Lateral remains subject to a separate environmental and regulatory approval process. Once completed, this infrastructure will be critical for translating upstream output into market availability. Without the pipeline, the gas remains stranded—even if reserves are proven.

What Has Delayed the Narrabri Gas Project Until Now?

Despite exploration beginning over a decade ago, the Narrabri Gas Project has experienced extensive delays due to legal challenges, environmental assessments, and cultural heritage claims. In September 2020, the New South Wales Independent Planning Commission granted conditional planning consent, but appeals from Indigenous groups and environmental stakeholders prevented Santos from advancing to construction.

The final regulatory obstacle was cleared in May 2025, when the National Native Title Tribunal ruled in Santos’ favour. The tribunal imposed strict conditions requiring Santos to protect Indigenous heritage, engage with the Gomeroi Nation, and implement environmental management systems. These safeguards now form part of the project’s compliance obligations as it heads toward final investment consideration.

What Are the Environmental and Cultural Risks of the Narrabri Project?

The project’s location in the Pilliga Forest and proximity to the Great Artesian Basin has drawn widespread concern. Environmental groups argue that large-scale coal seam gas extraction could compromise groundwater systems, increase methane emissions, and harm regional biodiversity.

Cultural concerns are equally significant. The Gomeroi people have repeatedly warned that Narrabri’s development risks damaging sacred sites and eroding Indigenous heritage. The tribunal decision does not dismiss these concerns; rather, it requires Santos to follow a strict environmental and cultural management framework. Whether those protections will be effective remains a live debate in both policy and public spheres.

How Will the Narrabri Gas Project Affect Santos and Australia’s Gas Supply?

Narrabri represents a strategic pivot for Santos—away from export-focused gas development and toward shoring up Australia’s domestic energy needs. While Santos remains heavily invested in LNG projects in Queensland and Papua New Guinea, the Narrabri development is aimed at helping Australian households and manufacturers avoid supply shocks.

If developed as proposed, the project could enhance Santos’ long-term gas portfolio by enabling stable, regulated-price gas sales through long-term domestic contracts. Narrabri also aligns with Australian federal and state policies that increasingly prioritise energy security and resilience amid global commodity volatility.

What Is the Status of the Narrabri Gas Project as of May 2025?

The latest milestone came in May 2025 when the National Native Title Tribunal granted production lease approvals for the project. The ruling mandates that 100% of gas produced from Narrabri be reserved for Australian use. It also imposes binding environmental and cultural heritage conditions, which Santos must satisfy before commencing construction.

Santos has stated that a final investment decision will be made later in 2025, pending pipeline permitting and stakeholder consultation outcomes. If approved, construction of the Narrabri Lateral Pipeline could begin in early 2026, with first gas projected to flow by 2027 or 2028.

What Is the Long-Term Outlook for the Narrabri Gas Project?

Looking ahead, the Narrabri Gas Project is positioned to become one of Australia’s most important domestic gas developments—if Santos can meet the terms of regulatory compliance and stakeholder engagement. Its potential to meet up to half of New South Wales’ gas needs over the next two decades places it at the heart of Australia’s energy transition strategy.

However, success will depend on balancing reliable energy delivery with environmental stewardship and Indigenous rights. If managed transparently and responsibly, the Narrabri Gas Project could become a template for reconciling fossil fuel development with social and ecological accountability in Australia’s evolving energy landscape.