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Summary

Santos is finalising a thorough review of all of Eastern Star Gas (Eastern Star) facilities and practices following its acquisition of the Company on 17 November 2011 and announced today a commitment to invest $20 million in upgrading Eastern Star's sites, equipment and processes to ensure the operations in the Pilliga State Forest meet best practice standards.

  • Detailed investigations show soil samples well within relevant safety guidelines
  • Eastern Star practices and reporting processes found inadequate
  • Santos commits to remediation and extensive upgrade of Eastern Star equipment and procedures
  • Report submitted to NSW Government

Santos is finalising a thorough review of all of Eastern Star Gas (Eastern Star) facilities and practices following its acquisition of the Company on 17 November 2011 and announced today a commitment to invest $20 million in upgrading Eastern Star’s sites, equipment and processes to ensure the operations in the Pilliga State Forest meet best practice standards.

Today Santos submitted a detailed report arising from its review of Eastern Star, including external scientific tests and analysis, to the NSW Government which is also conducting an investigation of sites previously operated by Eastern Star. The Santos report has identified an unacceptable culture in Eastern Star of accepting minor spills, failures in reporting and the possibility of unapproved land clearing on some sites.

The report includes the results of detailed investigations into soil conditions surrounding Eastern Star’s Bibblewindi water treatment plant in the Pilliga.

Extensive soil tests undertaken by external scientific consultants demonstrate that the levels of elements and compounds in soil near the site, with the exception of salt, do not represent health or ecological risks. In fact, the tests show that the soil is below the most sensitive health-based land use soil criteria under the National Environment Protection Measure guidelines.

The soil analysis also indicates the small area of vegetation die-back adjacent to the Bibblewindi plant has been caused by the elevated salt levels. This is as a result of accidental water releases at the site which should not have occurred and would have been preventable if Eastern Star had appropriate processes in place. The impacted area will be remediated.

Santos Vice President Eastern Australia, James Baulderstone, said: “I want to make two things clear to the community. First, none of the process failures or impacted vegetation that we have identified in our review of Eastern Star are acceptable to Santos and we can appreciate why some local residents have been critical. Secondly, the key point arising from our detailed review is that despite these process failures, the impacts are limited and will be remediated.”

“The extensive testing and analysis released today shows recent claims about dangerous toxicity levels in the Pilliga were misleading and have caused unnecessary concern in the community about CSG. The claims ignored the fact that the trace elements highlighted are naturally occurring in the Pilliga. In the impacted area around the Bibblewindi plant the trace elements remain at levels well within health and safety guidelines.

“Nevertheless, Eastern Star’s practices were not up to the standards the community is entitled to expect and Santos is taking action to ensure much higher standards of operation and reliability are maintained from here on.

“The NSW Government is conducting its own investigations and we are cooperating fully with that process,” Mr Baulderstone said.

Santos is preparing a detailed rehabilitation plan for this land which will be submitted to the NSW Government, and the company will commence rehabilitation of the land as soon as the plan is approved by the various responsible NSW Government agencies.

Santos is in the process of redesigning Eastern Star’s operational facilities. The overall upgrade requires an initial investment of $20 million and includes:

  • A complete design review of the Bibblewindi plant.
  • Upgrade of the plant’s tanks, pumps and machines.
  • Installation of new concrete bunds to prevent future water releases.
  • A new water and brine management system.
  • Replacement of pipework as required.

Santos has scaled back operational activities in the Pilliga while it completes the Eastern Star upgrade and remediation plans.