This article was first published on Rigzone here

Santos Ltd. said Monday it had signed a non-binding memorandum of understanding to supply ENGIE SA with up to 20 petajoules a year of natural gas for 10 years from the Narrabri Gas Project in New South Wales.

French utility ENGIE has committed 100 percent of the purchase to Australia, in line with Santos’ plan to dedicate the project’s entire production to the domestic market. Deliveries will begin upon the start-up of the project, according to a statement from Adelaide-based Santos.

Santos expects the project to supply up to half of New South Wales’ gas needs. It plans to gradually develop 850 wells. The company has yet to make a FID (final investment decision).

“Santos already produces Narrabri gas from appraisal wells for the Wilga Park power station that generates electricity for the northwest NSW grid. This experience, combined with our project development and production experience in Queensland’s Surat Basin, gives us confidence that Narrabri gas will be a very competitive source of domestic gas supply for the east coast market that is further advantaged by proximity to customers in NSW,” said Santos managing director and chief executive Kevin Gallagher.

Since 2011 Santos has invested over AUD 1.5 billion in the asset, according to the company.

“Delays to bringing Narrabri gas to market have occurred as a result of a number of factors including government moratoriums, independent scientific reviews, delayed and lengthy approvals, legal appeals and native title processes. As a result domestic gas supply has been tight and domestic gas prices have been higher than they should have been on the east coast”, Gallagher claimed.

Take control of your future.
Search THOUSANDS of Oil & Gas jobs on Rigzone.com
 Search Now >>

“Narrabri will be subject to some of the strictest environment and groundwater protections in the world, and we will comply with them”, Gallagher said.

Santos and ENGIE also committed to “exploring decarbonization activities through Santos’ third-party carbon management business, specifically via the proposed Moomba phase II carbon capture and storage project”, Santos said.

Moomba CCS started operations October 2024. Phase I has a declared capacity of up to 1.7 million metric tons a year of carbon dioxide equivalent. Moomba CCS injects into depleted reservoirs near the Moomba oil and gas gathering and processing complex, which serves the onshore Cooper and Eromanga basins.

In 2023 two Japanese companies came onboard after Australia passed legislation that would allow foreign companies to ship CO2 via Australian waters. “The signing of a memorandum of understanding between Santos, JX Nippon Oil & Gas Exploration Corp. and ENEOS Corp. paves the way for a joint feasibility study that will evaluate the potential to capture, transport and sequester emissions from Japan, supporting expansion of the Moomba CCS project”, Santos said December 18, 2023.

Story Continues

In a statement June 11, 2025, Santos said, “Phase II of the Moomba CCS project aims to utilize these depleted reservoirs to store third-party emissions from domestic and Asian customers to create a commercial carbon management services business to help these customers build more sustainable business models and to achieve their own emission reduction targets”.

To contact the author, email [email protected]

More From Rigzone.com, The Leading Energy Platform:

Petrofac Goes to Supreme Court after Restructuring Plan Quashed North America Ends Rig Addition Streak Where Did ExxonMobil's Oil, Gas Output Come From in 2Q? Natural Gas Price Drops Below $3 'Amid Lack of Support'

>> Find the latest oil and gas jobs on Rigzone.com <<

View Comments