Northern Territory energy: Tamboran inks new deal to supply the NT with gas

A ‘transformational’ gas deal which will power the Northern Territory for at least the next decade has been signed. Here’s what it means for your power bills.

Energy company Tamboran Resources and the NT government have signed a 15-year binding gas sales agreement to supply almost two-thirds of the Territory’s current gas needs from the Beetaloo Sub-Basin.

The company announced via the ASX on Tuesday morning it would supply the government with 40 terajoules of gas a day from the proposed Shenandoah South Pilot Project for an initial term of nine years, expected in the first half of 2026 pending final approvals.

The government has signed an option to extend the gas sales agreement for a further six-and-a-half years through to 2042.

Tamboran chief executive Joel Riddle joined Chief Minister Eva Lawler at Weddell Power Station on Tuesday morning for the announcement.

Tamboran Resources Chief Executive Joel Riddle, Environment Minister Kate Worden, Chief Minister Eva Lawler and Mining Minister Mark Monaghan welcomed a deal to supply almost two-thirds of the NT’s gas. Picture: Pema Tamang Pakhrin

Details of the deal remain commercial in confidence, but Ms Lawler said the agreement was a result of “substantial negotiations” and a significant step in ensuring energy security.

“We need to continue to have negotiations with other proponents in the Northern Territory, we want to have a portfolio of gas so that we aren’t reliant on one source, because we were with ENI,” she said.

ENI’s Blacktip gas field has struggled to meet demand under its 25-year contract with the government, something Mr Riddle believed had contributed to higher power prices for Territorians.

He said the “incredibly high quality gas” from Beetaloo had the potential to single-handedly “drive down gas prices in the near term, midterm and long-term”.

The government met with ENI this week and said the company would continue working to fulfil its contractual obligations.

‘Bullseye’ moment: East coast gas supplies are predicted to run short at the same time Tamboran scales up. Picture: Supplied

Mr Riddle said the Barossa project would generate $17bn for the Territory economy, create thousands of jobs as the project scaled up, and allow Tamboran to target other markets both nationally and overseas.

The latest Australian Energy Market Operator gas market outlook for Australia’s east coast has forecast a gap in gas supply for southern states from 2028, as production from Bass Strait continues to decline faster than demand.

“We believe that’s kind of a bullseye for the first wave of a large Beetaloo development to target 1000 Tj/d, and be able to dovetail into the market exactly at the time at which Bass Strait starts to roll off,” Mr Riddle said.

Tamboran Resources Chief Executive Joel Riddle. Picture: Pema Tamang Pakhrin

Tuesday’s announcement is conditional on a number of factors including the Beetaloo Joint Venture entering into a gas transportation agreement with gas transportation company APA Group on the proposed Sturt Plateau Pipeline, and final investment decision on the Shenandoah South pilot project, which is expected in the middle of the year.

Mr Riddle said he was highly confident the “transformational” deal would go ahead.

“Tamboran has always promised that our first gas production from the Basin would be to the benefit of Territorians and we are excited to play our part in boosting energy security in the Northern Territory,” he said.

“This is a transformational development for Tamboran and our partners, after 10 years of hard work and more than $500m invested in Beetaloo exploration and appraisal activities.

“In addition, the proposed pilot project is expected to provide initial royalties to both the Northern Territory government and traditional owners within the region.

“Due to the use of natural gas in the electricity supply, the Northern Territory is well below the national average for emissions intensity across Australia’s electricity network especially NSW, Victoria and Queensland who rely heavily on coal.”

Opposition Leader Lia Finocchiaro said more needed to be done to support the NTs onshore gas industry. Picture: Fia Walsh.

Opposition Leader Lia Finocchiaro welcomed the deal but said more needed to be done to provide certainty to the onshore gas industry.

“Until Labor gets serious about giving the green light to gas, and fast-tracking approvals processes, this industry still hangs in the balance,” she said.

“This government has flip flopped over gas and not been able to deliver for Territorians despite the fact that the Beetaloo Basin presents an enormous opportunity not just economically, but socially for Territorians.

“Territorians could have already been having the benefit of this onshore gas industry years ago.”

Originally published as Northern Territory energy: Tamboran inks new deal to supply the NT with gas