The New South Wales government will open new areas for gas exploration for the first time in more than 10 years, moving to secure the state’s energy future.
Two regions in the state’s Far West, the Bancannia and Pondie Range Troughs, have been identified for exploration to complement the existing Narrabri Gas Project.
The decision follows warnings from the Australian Energy Market Operator (AEMO) of looming supply gaps across the east coast.
Gas is a linchpin for the state’s economy, with approximately 40 per cent of supply used by industry for high-temperature manufacturing processes required to produce glass, bricks, paper, and processed foods.
Beyond manufacturing, the government noted gas’s role in firming the electricity grid. As NSW transitions to renewable energy, gas provides essential on-demand power to maintain stability when wind and solar output is low.
To encourage activity, the government will slash gas exploration licence application fees from AU$50,000 to just AU$1,000.
Minister for Natural Resources Courtney Houssos described the move as a methodical step to ensure energy security for decades to come.
“We can’t flick a switch and have this come online overnight,” Houssos said.
“What we need to do is make sure we are responsibly pulling every lever to support a stable and robust energy grid for decades to come.”
The government confirmed that any gas produced from these new areas must be reserved for the domestic market.
Australian Workers Union NSW Secretary Tony Callinan praised the move, stating it ensures production goes to local users rather than straight onto a ship.
While the three-month Expression of Interest (EOI) period opens on May 1, the government maintained that strict environmental protections remain.
Exploration is prohibited in national parks, and all projects must undergo independent planning assessments consistent with the state’s net-zero emissions targets.
The industry has welcomed the announcement, with Australian Energy Producers describing it as an essential step in easing price pressures and ensuring NSW remains competitive in volatile global markets.
NSW State Director Peter Kos said the release of acreage would help unlock new domestic gas resources.
“Natural gas is essential to NSW’s energy security and economic growth, and we need continued investment in exploration and production to secure our state’s long-term energy needs,” Kos said.
“The gas industry stands ready to work with the NSW government to bring new supply online and deliver affordable, reliable and cleaner energy for households and businesses.”
Business NSW CEO Daniel Hunter also noted the importance of gas affordability to small business.
He pointed out that over 50,000 small businesses and 1.5 million households depend on the network, with gas prices having surged by nearly 50 per cent for business customers in recent years.
“Gas is critical to producing everyday essentials, from food and beverages like bread, milk, coffee and beer, to plastics, fertilisers, clothing, construction materials and medical products,” Hunter said.
“The NSW government’s move to open two new regions for gas exploration is an important step in ensuring businesses can thrive.”
