The Minns Labor Government will open new areas for gas exploration in NSW for the first time in more than a decade, taking decisive steps to secure the State's energy supply for households and businesses.
NSW is forecast to face gas shortfalls in the years ahead, with the Australian Energy Market Operator warning of supply gaps across the east coast. Gas is not only used in homes - around 40 per cent of NSW's gas goes directly to industry, where it is used to generate the high-temperature heat needed to manufacture products like glass, bricks, paper, chemicals and processed foods.
Gas also plays a critical role in keeping the electricity grid stable. As NSW increases its renewable energy generation, gas helps 'firm' the grid, providing on-demand power that keeps the lights on when wind and solar output is low.
Despite an independent recommendation in 2021 that new gas exploration areas should be opened, the former Liberal-National Government chose not to act.
The Minns Government is taking practical and necessary steps to strengthen domestic supply and bring NSW in-line with other states. New areas are being released to support future domestic gas supply, and any projects that progress to production will supply gas to the domestic market.
Two regions in the state's Far West - the Bancannia and Pondie Range Troughs - will be opened for gas exploration. These opportunities for new gas supply will complement the Narrabri Gas Project.
To attract investment and ensure NSW remains competitive with other states, the Government will also update regulations to reduce the gas exploration licence application fee from $50,000 to $1,000.
Not all exploration licences proceed to gas production. Any prospective gas project would be subject to an independent planning assessment, with strict environmental protections and comprehensive engagement with local communities, landholders and Traditional Owners. This will also involve interactions with planned renewable energy projects. There will be no gas exploration in national parks and any proposals for new gas production must be assessed consistent with the state's emissions targets.
The NSW Government has committed to updating a Future of Gas Strategy in this term of government.
The first step in opening new areas for exploration is an Expression of Interest process. The three-month application period for gas petroleum exploration licences in Western NSW will open on 1 May 2026. Further information on release areas and guidelines is available at resources.nsw.gov.au/eoi-exploration.
Quotes attributable to Minister for Natural Resources Courtney Houssos:
"The Minns Labor Government is taking practical steps to secure a reliable, domestic supply of gas for NSW homes and industry.
"We are creating more opportunities for NSW - strengthening energy security while supporting households, jobs, industry and economic growth.
"We can't flick a switch and have this come online overnight. What we need to do, carefully and methodically, is make sure we are responsibly pulling every lever to support a stable and robust energy grid for decades to come. Current global events make this work more important than ever.
"We will support manufacturers and business to harness new opportunities to access reliable, affordable energy sources to grow jobs and investment across NSW."
Quotes attributable to Minister for Industry and Trade Anoulack Chanthivong:
"A secure gas supply is essential for NSW manufacturers, supporting the high temperature processes that underpin jobs, exports and economic growth.
"In a time of great uncertainty, we're backing local industry and ensuring NSW remains competitive and resilient in increasingly volatile global markets.
"This is a balanced, practical approach that supports investment certainty while maintaining strong environmental safeguards."
Quotes attributable to Australian Workers Union NSW Secretary Tony Callinan:
"Energy-intensive manufacturers across NSW depend on reliable and affordable gas. Without it, jobs go offshore and emissions go with them.
"The Minns Government is showing leadership by acting now to strengthen NSW's gas position and ensuring any new production goes to Australian users rather than straight onto a ship. That is the model the nation needs to build on."
Quotes attributable to Australian Energy Producers NSW Director Peter Kos:
"Today's announcement is the first essential step in unlocking new domestic natural gas resources for NSW homes and businesses.
"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.
"The gas industry stands ready to work with the NSW Government to bring new supply online and deliver affordable, reliable and cleaner energy for the state's households and businesses."
Quotes attributable to Business NSW CEO Daniel Hunter:
"In 2019 Business NSW called for the expansion of our state's domestic gas supply, and most recently in our Running on Empty 2.0 report in December. The NSW Government's move to open two new regions for gas exploration is an important step in ensuring businesses can thrive.
"Gas affordability and supply security remain critical for many small businesses, particularly in manufacturing, food processing, hospitality and regional industries, where gas is essential and alternatives are not always practical or cost-effective.
"Over the past four years, gas prices have risen by 35 per cent for households and almost 50 per cent for business customers, according to IPART. A Business NSW survey shows nearly one in five NSW businesses depend entirely on gas, rising to 64 per cent in hospitality.
"Gas powers more than 1.5 million households and 50,000 small businesses, and underpins whole sectors including manufacturing, food processing and mining. Many gas reliant businesses depend on gas not just for energy, but as a high temperature heat source and as a chemical feedstock for products like fertilisers, chemicals and plastics.
"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."
