Santos Ltd’s boss Kevin Gallagher has launched a scathing attack on Victoria’s gas policy.
Speaking at an oil and gas conference in Brisbane, the CEO claimed the state’s policy environment is driving major investment offshore and undermining Australia’s energy competitiveness.
Gallagher said the lack of support for gas development in Victoria was a clear factor in the company’s decision to prioritise opportunities in Papua New Guinea and the United States over domestic projects.
“If I think about Queensland, South Australia, Western Australia – these are very supportive, very development-friendly jurisdictions,” he said. “Victoria? North Korea. They’re different altogether.”
While acknowledging the controversial nature of the comparison, Gallagher said: “I’m going to get in trouble for that. I may have another coaching session coming up,” referring to previous media training.
Stalling gas developments
Victoria is the most gas-reliant state in the country but has imposed a ban on new gas connections for homes and businesses from 2024 and has set ambitious renewable energy targets. Gallagher and other industry leaders argue that these policies, alongside regulatory delays, are stalling crucial domestic gas developments.
Gallagher pointed to the company’s Narrabri Gas Project in New South Wales as an example. Although Santos is ready to proceed with the project, approvals for necessary infrastructure remain outstanding. “If I had $1 to spend in PNG, Alaska or Australia today for the same project and with the same economic returns, it would be PNG or Alaska because I know that when I get my project approved, and I start to spend serious dollars, I get to finish the project,” he said.
Shortfall risk
The sector has repeatedly warned that without new local gas supply, Victoria faces a significant shortfall on the east coast from 2029, potentially earlier. With traditional sources such as the Bass Strait fields in decline, the state is expected to increasingly rely on imported LNG, which would come at a premium and may place further cost pressures on households.
Gallagher’s comments are among the strongest yet from an energy industry leader and highlight broader concerns that inconsistent or ideologically driven energy policy risks eroding Australia’s appeal as an investment destination.
While Queensland and Western Australia continue to attract billions in gas and hydrogen projects, Victoria and, to a lesser extent, NSW are viewed as far less favourable. This sentiment is echoed by other major players, including Woodside Energy, which has committed substantial funds to US developments amid mounting regulatory hurdles at home.