The PEP-11 gas project has suffered another blow after years of political drama.

Industry Minister Ed Husic has issued a preliminary refusal of the PEP-11 project - a plan for offshore gas exploration in a 4,500 square kilometre area stretching from Manly to Newcastle in NSW.

The proposal had long drawn opposition from environmental groups and local communities. 

It made headlines when former Prime Minister Morrison announced in late 2021 that his government would reject a two-year extension of the exploratory drilling licence. 

It was later revealed that Morrison had sworn himself into the portfolio of then-resources minister Keith Pitt to reject the application, circumventing Mr Pitt's wishes to extend it.

Morrison’s secret action led Asset Energy to challenge the decision in the Federal Court. 

In a post-election ruling, the court found Morrison's decision biased and ordered the Albanese government to reconsider the case.

Husic's announcement follows that reconsideration. 

Asset Energy Pty Ltd claimed that the Commonwealth-NSW Offshore Petroleum Joint Authority failed to make a timely decision on its permit applications, forcing it to seek a court order compelling a decision.

In his statement, Husic indicated that while he had reviewed all the submitted materials, his preliminary view was that the applications should be refused. 

However, he noted that Asset Energy has 30 days to provide further information addressing his concerns before a final decision is made. 

“This gives Asset Energy an opportunity to address my concerns before any final decision is made,” Husic said.

Earlier this year, Resources Minister Madeleine King recused herself from handling the matter due to her pre-election criticisms of the project. 

This left the decision to Husic, who now holds the final say.

The PEP-11 project has been a flashpoint of local opposition, particularly from communities along the northern beaches and the broader coastal area between Sydney and Newcastle. Local MPs have welcomed a potential victory for those who have fought against the project.

Asset Energy has held the PEP-11 exploration permit since 1999, with several extensions granted over the years, including delays related to the COVID-19 pandemic. 

The project was set to involve the drilling of an exploration well 26 kilometres southeast of Newcastle, which, according to Asset Energy, would not be visible from the coast.

Husic says the assessment process is being conducted in accordance with the Offshore Petroleum and Greenhouse Gas Storage Act 2006. 

The final outcome is likely to be contingent on whether Asset Energy can satisfactorily address the minister’s concerns within the 30-day period.

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