Santos and ENGIE sign MOU for Narrabri gas supply, aiming to boost domestic energy, decarbonisation, and energy reliability in Australia.
Santos has signed a non-binding Memorandum of Understanding (MOU) with ENGIE, a diversified global energy provider, for the future supply of natural gas from the Narrabri Gas Project. This agreement marks a key step in boosting Australia's east coast domestic gas supply. Under the proposed deal, Santos plans to supply up to 20 petajoules (PJ) of gas annually to ENGIE over a minimum period of 10 years once the project becomes operational. Crucially, ENGIE has committed to directing 100% of this gas to the domestic market.
ENGIE is focused on aiding its customers’ transition toward net zero by delivering renewable energy, flexible generation options, and integrated energy solutions. The company manages a diverse portfolio in Australia, including wind farms, large-scale battery systems, and gas-fired power stations, while also serving commercial and industrial clients with tailored energy services.
In addition to the gas supply arrangement, Santos and ENGIE are exploring collaboration on decarbonisation initiatives. This includes potential cooperation in Santos' third-party carbon management business, particularly the Moomba Phase 2 carbon capture and storage (CCS) project. However, the Narrabri supply deal remains contingent on several conditions: Santos must make a final investment decision (FID), a legally binding gas supply agreement must be concluded, and both parties must secure necessary approvals.
Santos Managing Director and CEO, Kevin Gallagher, emphasized the urgent need for more domestic gas sources on the east coast to enhance supply security and price stability. He pointed out that Santos voluntarily committed the entire output of Narrabri gas to the domestic market as early as 2020. The company already produces small quantities of gas from appraisal wells to power the Wilga Park station, which supplies electricity to northwest New South Wales.
Gallagher highlighted Santos' long-term commitment to the Narrabri project, having acquired the asset in 2011 and investing over A$1.5 billion to date. He acknowledged that progress has been hampered by several challenges, including government-imposed moratoriums, environmental reviews, prolonged approval processes, legal challenges, and native title matters. These delays, he argued, have contributed to restricted domestic supply and inflated gas prices across the east coast.
Describing the project as "strategic," Gallagher called for coordinated action between Santos and both state and federal governments to push it forward. He noted that the NSW Independent Planning Commission (IPC), after a thorough assessment including climate considerations, approved the project. According to Gallagher, the IPC’s decision followed expert evaluations that concluded the project’s risks were low and manageable under strict conditions.
Gallagher assured that Narrabri would operate under some of the world’s strictest environmental and groundwater safeguards and that Santos would fully comply. He further referenced the federal government’s Future Gas Strategy, which emphasizes the indispensable role of gas in supporting renewable energy transitions and domestic manufacturing.
Finally, Gallagher stressed the importance of a reliable, locally sourced, and competitively priced gas supply for consumers in Sydney and regional NSW. He expressed confidence that the operating model that has succeeded in Queensland—focused on safety, cost efficiency, and community support—can be replicated in New South Wales to benefit the broader region.
