ENI Australia sued by NT Government over costly Blacktip supply disruptions
The Treasurer says the NT Government will attempt to claw back money it lost by being forced to go to the expensive gas spot market and sign short-term deals, allegedly due to ENI’s supply issues.
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The NT Government is suing its major gas supplier over supply curtailment that has forced it to seek fuel on the costly spot market and via other short-term deals, which the Auditor-General says has led to a $48.3m fiscal deterioration for Power and Water Corporation.
Treasurer Bill Yan’s confirmation of legal proceedings on Wednesday was prompted by the release of Auditor-General Jara Dean’s latest Report to the Legislative Assembly.
In his report, Mr Dean said Power and Water’s (PWC) fiscal deterioration from a surplus of $40.5m to a loss of $7.8m last financial year was “predominantly due [to] an increased cost of emergency gas following the curtailment of supply from PWC’s main supplier”.
The supplier subject to the proceedings, ENI Australia, inked a 25-year deal in 2009 to supply PWC with up to 860 petajoules of gas over the life of the contract, but in 2021 its Blacktip gas field in the Joseph Bonaparte Gulf began experiencing supply issues.
Earlier this year, PWC told an estimates hearing emergency deals to secure reliable supply were estimated to cost about $70m.
The government utility has signed a 10-year gas supply deal with Empire Energy, six-year deals with the Mereenie and Palm Valley joint ventures, a short-term deal with Santos for Inpex gas, and also sought to scrounge the last supplies coming out of Bayu-Undan.
A controversial 15-year deal with Tamboran for Beetaloo gas, commencing in 2026 pending final approvals, was signed earlier this year under the former Labor government.
When asked by this masthead, Mr Yan confirmed the government was now involved in legal proceedings against ENI Australia, which has seen production from its Blacktip field plummet from its 2019 high.
“There is legal action underway by the Northern Territory Government over that supply out of Blacktip,” Mr Yan said.
“That’s taking place at the moment, I don't know what the state of play is with that.
“But we are looking to bring back some funding from that legal process with Blacktip.”
This masthead has sought additional comment from Mr Yan’s office regarding the nature of the legal proceedings.
ENI Australia, which is in the process of drilling new wells at Blacktip, but which are not expected to be operational for several years, was also contacted for comment.
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Originally published as ENI Australia sued by NT Government over costly Blacktip supply disruptions
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