Bloomberg reported that Santos Ltd, Australia third biggest oil producer and its partners may spend more than AUD 16 billion on coal-seam gas development in New South Wales states.

According to the Allen Consulting Group study commissioned by the company Santos and partners plan to invest AUD 1 billion within five years exploring coal seam gas reserves in the northwest part of the state. The development may transform New South Wales into a gas-exporting state, supply as much as 30% of east coast demand and contribute AUD 15.2 billion to the state economy through 2035.

Mr James Baulderstone the company vice president for eastern Australia said “There is a large opportunity a very large prize, but before you can access that prize you have to make sure the gas is there and can be brought up safely and sustainably. The most important thing for us is we’re allowed to continue to explore.”

Coal-seam gas producers globally are facing opposition from political and environmental groups concerned their drilling methods may harm water supplies. Santos is building a USD 16 billion development in Australia northern Queensland state to liquefy gas from coal deposits for export to Asia.

Santos was little changed at AUD 12.19 in Sydney trading. The shares have fallen 7.3% this year, compared with a 15% decline for the benchmark S&P/ASX 200 Index.

(Sourced from Bloomberg)