The National Native Title Tribunal has ruled in favor of approving energy company Santos' (ASX:STO) lease application for its Narrabri gas project in New South Wales amid supply constraints, despite protests from its traditional owners, according to a May 19 document.

In its ruling, the Tribunal said its lease grant is subject to various conditions, including Santos' commitment to allocate all of the gas recovered to the domestic supply.

Gas shortage has been a concern in Australia, particularly on the east coast, which is feared to face a deficit of 9 petajoules during the winter season, Reuters reported on March 27, citing the Australian Competition and Consumer Commission's quarterly update.

Santos obtained preliminary consent in 2022 for the project, but that was appealed by the Gomeroi People.

The project spans 95,000 hectares and targets to extract gas from coal seams between 300 and 1,200 meters below ground, produced from up to 850 new wells on a maximum of 425 well pads, according to the document. It remains subject to other regulatory consents.

Santos' shares were up 2% in recent trade.