Moomba’s carbon capture plant injected its millionth tonne of CO2 sometime around the middle of this year, give or take, depending on which Santos investor update you’re reading. Nobody rang a bell. It’s a flow-through number in a quarterly, not a headline, and that tells you something about how this company actually operates versus how it gets talked about. Santos has spent the better part of a decade as the villain or the saviour of the east-coast gas debate, depending on who’s writing, and both framings miss what’s actually happening at Moomba and at Narrabri.
Agree on the units first, because this argument gets muddled constantly. East-coast gas supply is measured in petajoules a year. Narrabri, the Pilliga project in northern New South Wales, was approved by the NSW Independent Planning Commission in 2020 for up to 200 petajoules a year at peak, roughly half the state’s annual gas demand at the time. Moomba’s carbon capture and storage project, in the Cooper Basin in South Australia’s north-east, is a different animal entirely. It’s not a supply project, it’s an emissions-reduction project bolted onto decades-old gas and liquids production, with Santos targeting around 1.7 million tonnes of CO2 stored annually once fully ramped. Treating these two projects as a single “Santos gas story” is where most of the public argument goes sideways.
Narrabri: approved, not built, still not flowing #
Here’s where things actually sit with Narrabri as of this year: the project has its state planning approval, it has a petroleum production lease, and it still hasn’t produced a molecule of commercial gas. Santos has pushed first gas timing back repeatedly since the original targets floated in the early 2020s, and the company’s own investor materials now talk about a path to production later in the decade rather than anything imminent. The project remains tied up in further approvals, native title processes, and ongoing opposition from parts of the local Gomeroi community and farming groups in the Pilliga region, even after the Federal Court knocked back a native title compensation challenge that had threatened the timeline.
Worth saying plainly: this isn’t a case of a company sitting on gas out of malice or out of incompetence. Coal seam gas projects in NSW have had a genuinely difficult run with planning and water approvals since the Pilliga became a flashpoint back in the 2010s, and the regulatory bar the IPC set was, by design, higher than anything Queensland’s CSG fields faced going in. Santos has had to build water management infrastructure, biodiversity offsets and monitoring regimes that didn’t exist for the earlier Queensland projects. That’s not spin, that’s in the conditions of approval themselves, which sit on the NSW planning portal for anyone who wants to check.
Why Narrabri matters more to NSW than to the NEM broadly #
The gas Narrabri would produce doesn’t flow into the wholesale electricity market directly. It goes into the domestic gas network, heating homes, running industrial processes, and backing up a handful of gas peaking plants. But the connection to electricity reliability is real, just indirect. Our previous look at gas peakers versus big batteries for grid firming covers why gas still matters for the sharpest reliability spikes even as batteries take more of the daily load. NSW’s own gas task force and successive state energy ministers have flagged domestic supply tightness as a live risk heading into the back half of this decade, particularly as Victorian Bass Strait fields decline faster than new supply comes on.
AEMO’s most recent Gas Statement of Opportunities has flagged potential shortfall risk in southern states in cooler years without new supply or import capacity, a point worth checking directly against AEMO’s published market data rather than taking anyone’s press release as gospel. Narrabri, if it ever gets built, would be one of the larger single projects addressing that gap. If it doesn’t get built, NSW leans harder on Queensland pipeline gas and LNG import terminal proposals, both of which carry their own cost and timing questions.
Moomba CCS: the bit that’s actually running #
This is the part of the Santos story that gets less attention than it probably deserves, and I’ll admit I underrated it myself for a while. Moomba CCS reinjects carbon dioxide stripped from the Cooper Basin’s own gas production back into depleted reservoirs roughly two kilometres underground, using existing well infrastructure built decades ago for conventional gas and oil extraction. It came online in 2024 and has been running at increasing rates since, with Santos reporting progress toward its stated capacity target in quarterly filings lodged with the ASX.
The honest caveat here, and it’s an important one: Moomba CCS reduces the emissions intensity of Santos’s own upstream production. It does not offset downstream combustion emissions when that gas is burned in a power station or a gas cooktop. Critics, including some from the Australia Institute and parts of the environmental movement, have made that distinction loudly, and it’s a fair one to make. Santos counters that upstream abatement is a legitimate and measurable contribution under the Clean Energy Regulator’s method for CCS projects, which it is: the project is registered and credited under the Safeguard Mechanism framework, a scheme our piece on who’s really carrying the Safeguard Mechanism cost goes into in more detail. Both things can be true at once: it’s real abatement, and it’s not the full story on the molecule’s lifecycle.
Santos as a company, not just a project list #
Zoom out and Santos is a bigger, odder company than the Narrabri headlines suggest. It runs gas and LNG operations across the Cooper Basin, the Surat and Bowen basins in Queensland, Papua New Guinea, Western Australia’s Carnarvon Basin, and Timor-Leste, plus a stake in the Gladstone LNG export project. The company merged with Oil Search in 2021, a deal that reshaped its balance sheet and its PNG exposure considerably. More recently, Santos has been fielding takeover interest, including a period of due diligence from a consortium involving Abu Dhabi’s ADNOC alongside other international partners, which the company confirmed to the ASX before talks lapsed without a binding offer. That’s worth watching going forward: a company this central to east-coast domestic supply changing hands matters well beyond its shareholders.
Santos is also, not incidentally, one of the larger single emitters covered by the Safeguard Mechanism, which means its Moomba and Narrabri decisions sit inside a broader framework of declining baselines that every gas major on the east coast is now navigating. That’s a structural pressure that didn’t exist in anything like this form a decade ago, and it shapes the economics of these projects as much as gas prices do.
The domestic gas reservation argument, again #
Every winter this argument resurfaces in some form, and it did again heading into the 2026 heating season: should east-coast gas producers be compelled to reserve a fixed share of production for domestic use, the way Western Australia’s domestic gas reservation policy works for its own gas fields? Santos has consistently argued against hard reservation mechanisms, preferring the existing heads of agreement arrangements between producers and the federal government, which commit LNG exporters to offer uncontracted gas to the domestic market first. Industry bodies like the Australian Energy Producers association back that position; domestic gas users and some state governments want something with more teeth.
My read, for what it’s worth, is that the heads of agreement approach has worked better than its critics give it credit for, but worse than Santos and its peers claim. It has kept outright shortfalls off the table so far. It hasn’t done much for price, which remains tied to international LNG netback pricing regardless of where the gas is produced. That’s the genuine tension in this whole debate – reservation policy and price relief are not the same lever, and conflating them is how both sides talk past each other in budget estimates hearings every year.
Where this leaves the supply picture #
If Narrabri slips further, the practical effect falls on NSW gas users and on the handful of gas peaking plants that back up the grid during cold snaps and still periods: the same dynamic our look at the east-coast gas question heading into winter 2028 runs through in more detail. If it proceeds on anything like the current approvals timeline, it’s a genuine, if partial, answer to a supply gap that AEMO has flagged repeatedly and that state energy departments have been slow to plan around.
Moomba CCS, meanwhile, is quietly becoming one of the more credible industrial decarbonisation projects actually operating in Australia rather than sitting in a slide deck, even allowing for the upstream-only caveat. It won’t make Santos a clean company. It makes it a gas company doing one genuinely measurable thing about its own emissions footprint while the harder argument about Narrabri, water, native title and community consent grinds on in the background, the way these things in the Pilliga always have.
Whether that’s enough, or fast enough, depends entirely on whether you’re asking from a gas burner in regional NSW this winter or from a boardroom in Adelaide with a decade-long view. Both perspectives are legitimate. They’re just answering different questions.
– Tom Fitzgerald, Baseload & Fuels Correspondent
Photo by American Public Power Association on Unsplash