Federal Court halts Santos from laying pipeline for its Barossa gas project near the Tiwi Islands

A Federal Court ruling will prevent Santos from completing the laying of undersea pipelines, casting doubt over the company’s $5.3bn Barossa project.

Santos cannot fully lay undersea pipes for its $5.3bn Barossa development until at least January 2024, the Federal Court has ruled.

It’s the latest in a string of adverse rulings to befall Santos and this judgment threatens the company’s plan to produce its first gas from the Barossa project by early 2025.

Lawyers for Tiwi Islands traditional owner Simon Munkara in October sought a temporary injunction from Federal Court Judge Natalie Charlesworth in order to stop work on the 262km pipeline off the Tiwi Islands, insisting it would cause irreparable harm to traditional owners’ connection to sea.

In a ruling that will do little to aid Santos’s hope of reviving a project which has been hampered by a separate case, Justice Charlesworth said the company could begin laying gas pipelines but must stop near the Tiwi Islands until a final ruling was given – likely around mid January.

The ruling was welcomed by Indigenous campaigner Molly Munkara.

“I was calling out to ancestors all this week asking to protect our waterways, marine life, sea country. I asked for them to stop Santos, and they listened,” Ms Munkara said.

Santos chief executive Kevin Gallagher. Picture: AAP

Work on Santos’s Barossa gas facility has been suspended since last year after the Federal Court found the oil giant failed to consult local Indigenous people ­adequately.

Santos is still waiting for offshore safety authority NOPSEMA to rule on its updated environment plan, but had intended to finish laying the undersea pipes to mitigate the threat of any delays.

It cannot resume drilling until the regulator gives it the green light, but Santos has said it can only meet its production targets for first gas by early 2025 if work can resume by December 3.

If Mr Munkara is ultimately successful, Santos could be forced to develop a new environmental plan for the project.

The previous version of the plan, developed after Santos was barred from drilling, took more than a year to establish.

Santos said a full hearing of the case has been set for December 4 when it will vigorously defend the proceedings.

“Santos is committed to delivering the Barossa Gas Project,” the company said in a statement.

“With the Barossa Project set to supply the Darwin LNG plant for years to come, it is important for local jobs, as well as opportunities for Traditional Owners, exports, and relationships with investors and gas customers in Asia, that this project continues.”

The Australian understands Santos believes it can still meet its guidance, and will immediately start work on installing the pipeline where permitted.

But the company concedes an adverse ruling in January could derail those plans.

In a speech in WA just after the court ruling, Santos chief executive Kevin Gallagher said he would have to limit his comments until the company had digested the judgment, but said the ruling indicated the need for legal reform.

“A year ago, when the approval of the Barossa Drilling Environment Plan was set aside by the Federal Court, it was seen by some as a company issue,” Mr Gallagher said.

“Today, it is very clear that the regulatory system for offshore projects, administered by NOPSEMA, can no longer be relied upon.

“We are committed to the protection of cultural heritage and the environment. And we will respect the legal process. But no industry can function in an environment where the rules cannot be known and the goalposts continually move.

“Ultimately, no amount of climate litigation will make the energy transition faster or stop the oil and gas projects needed to meet the world’s energy demand.”

Opponents of gas developments particularly have successfully used legal challenges to block work, arguing that local stakeholders were not adequately consulted.

The gas industry has led calls for urgent legislative changes to clarify who is considered a relevant person. It says regional energy security is at risk if Australia allows the legal ambiguity to continue.

Originally published as Federal Court halts Santos from laying pipeline for its Barossa gas project near the Tiwi Islands