Australia's Santos Ltd <STO.AX> said on Thursday its $2 billion Narrabri Gas project has been referred to New South Wales' Independent Planning Commission (IPC) for approval.
The coal seam natural gas project could supply up to half of the state's gas needs and help ease soaring energy prices, but has faced opposition from farmers and green groups who claim it poses a risk to water for farming and indigenous communities.
A decision on the project is vital for Santos to decide on where it will invest in new natural gas projects to supply the east coast gas market over the coming decade, said Managing Director and Chief Executive Officer Kevin Gallagher.
A failure for the project to proceed will offer a fillip to rival schemes to import liquefied natural gas (LNG), but unions and industry stakeholders have said this will not do enough to lower energy costs and save jobs in manufacturing.
"If we can develop Narrabri gas, it will be the most competitively-priced gas for NSW customers, and it will always be cheaper than LNG imports, especially when gas prices are high in Asia," Gallagher said.
Santos said the next step would be for the New South Wales Department of Planning to complete an assessment which it would provide to the IPC for its consideration.
(Reporting by Rashmi Ashok in Bengaluru; Editing by Christian Schmollinger)
