Santos urges manufacturers to invest in onshore gas projects


Santos‘ eastern Australia Vice President Peter Cleary told a gathering of plastic and chemical producers that manufacturing companies could alleviate the impending shortage of domestic gas by embracing early stage investment in gas projects.

Santos urges manufacturers to invest in onshore gas projects
Image credit: APPEA

According to the Sydney Morning Herald, Mr Cleary said more gas would have been available today had manufacturing companies invested more in the sector over the past decade, pointing out Orica‘s deal with Strike Energy, Alcoa‘s partnership with Empire and Buru, and Dow Chemical‘s arrangement with Lakes Oil in Victoria as successful investment examples.


“It takes big bucks to play in this space, but that doesn’t mean others can’t play. Anyone in this room is welcome to invest in some of the opportunities that Santos is trying to pursue, particularly in New South Wales,” he said.

“I would love to have industry as an upstream investor in that because I think it would show a powerful message to both the New South Wales government and the community in New South Wales that it is not just for one company’s benefit.”

Large gas consumers fear that domestic gas prices could significantly rise in the next five to ten years because of the looming increase in LNG exports, which could severely restrict their ability to operate within acceptable profit margins in Australia.

To ease the looming shortage of natural gas for domestic users, the Australian Workers Union has proposed that up to 20% of Australian gas production be put aside for domestic consumption, but Mr Cleary said Santos had already offered to go beyond those levels if allowed to operate in NSW.

“If we are allowed to produce, the first 100 terajoules per day we expect to go straight to the New South Wales market which would meet 25 per cent of that market’s requirements,” he said.

“What we need is the help to get the NSW public aligned behind the need for development.”