‘Tanks for nothing’: US Defence Secretary flies into tank farm firestorm

American Defence Secretary Lloyd Austin is flying into an unexpected firestorm as Darwin prepares to host trilateral talks. Read what’s wrong.

United State’s Defence Secretary Lloyd Austin is flying into a construction battleground as key players in the troubled East Arm tank-farm project face off.

With Secretary Lloyd Austin expected in Darwin this weekend for the 14th Trilateral Defence Minister’s meeting, the US Department of Defence’s $270m Darwin tank farm development is in disarray with the lead contractor dismissed, groundwater leaks detected in the tanks’ protective liner and an urgent search underway for a replacement builder.

Workers involved in the project say it has become a debacle, with lead contractor Latitude 63 bumped from the site late last month, only to apparently be reinstated and then removed again days later.

The NT News has learnt project completion, originally scheduled for September 2023, has now been delayed indefinitely.

Saunders and Crowley representatives with former chief minister Michael Gunner and NTG official Jason officials at the announcement of the East Arm tank farm contract with Crowley

The extent of the project cost blowout remains unclear, but it’s understood these are being absorbed by Crowley as the clock ticks on project completion.

The site is currently locked down.

US-based engineering company Crowley was awarded the tank-farm project by the US Defence Logistics Agency in 2021 to construct and subsequently manage 11 aviation fuel storage tanks in the Top End.

The facility is intended to store up to two-million barrels of aviation fuel potentially during training or military operations.

Secretary Austin’s Territory visit comes as the NT government has confirmed it is working with Crowley to get the project on track.

“Departmental officers inspected a tank in June 2024 and confirmed ongoing remediation works with Crowley, who are developing an environmental management system, appointing an external auditor, and implementing an environmental monitoring plan, all in compliance with their environmental approval and industry standards,” a spokesman said.

The United States government announced the development in 2019 when China had begun flexing its military muscle regionally, particularly around disputed territories near the Philippines.

The Crowley tank farm construction at East Arm

Privately-owned Crowley has been publicly silent on the proposal since the NT News reported last year significant issues threatened to delay the project.

In April 2023 Crowley sacked original lead contractor Saunders International and replaced it with Alaskan-based Latitude 63, which had been retained on-site since early 2023 to provide additional consultancy services around the project.

The NT News understands the 11 tanks are 100 per cent complete and the mechanical systems are also close to operational.

The challenge for Crowley now appears to be securing the rubber liners sealing the 11 tanks which have leaked and are now preventing project certification.

Early last year it was discovered groundwater during the Top End Wet season had penetrated the supposedly impervious rubber liners.

As the debacle has unfolded over the past 18-months, NT government agencies including WorkSafe and the Environment Protection Authority have been monitoring progress.

However key regulatory requirements have not been met including building certification, despite which the worksite remains operational as Crowley goes in search of a new lead contractor.

Secretary Austin will be joined by Japanese Defence Minister Gen Nakatani and Australian Defence Minister Richard Marles at the trilateral talks to discuss military cooperation, strategy and rising tensions across the Indo-Pacific.