Middle Arm project cost to taxpayers tipped to blow out by $2b, FOI documents reveal

The NT government has styled the project as an environmentally friendly ‘sustainable development precinct’ but the documents also note gas will form a key component of the development.

The documents show the project will provide an ‘opportunity for future production of ethane-based products such as plastics, paints, polymers and rubber’. Picture: Glenn Campbell

The cost to taxpayers of the Territory government’s signature Middle Arm mineral and energy hub could blow out by about $2b, documents released under freedom of information laws reveal.

The documents, released to the Environment Centre NT and seen by the NT News, put the total estimated cost of the project at $3.5b, up from the $1.5b currently committed by the federal government.

The NT government has styled the project as an environmentally friendly “sustainable development precinct” but the documents also note liquefied natural gas will form a key component of the development.

“In the Northern Territory region of Beetaloo sub-basin, around 500 trillion cubic feet of potential natural gas has been investigated in shale alone, exceeding 527,000 PJ,” the NT government submission reads.

“This discovery is approximately 1000 times Australia’s current annual domestic consumption, allowing Australian consumers to access cheaper and reliable gas and oil liquids over the next few decades.

“The potential for liquefied natural gas recovery from the onshore Beetaloo sub-basin project is an opportunity for future production of ethane-based products such as plastics, paints, polymers and rubber as well as, the opportunity to produce liquid fuels that support Australia’s energy security.”

It comes just days after the NT Government confirmed Middle Arm’s final terms of reference had been approved by Environment Minister Tanya Plibersek.

The documents also reveal the preferred $3.5b option for the facility’s development “includes both the multi-GW renewable power network and carbon capture storage”.

“These two projects within the program are central to the achievability of net zero and are examples of emissions reduction technology at scale,” they read.

“In addition to other efficiencies, modelling suggests minimal residual emissions requiring offsets as low as 2 to 3 per cent.

“While the industry mix at the precinct is not yet certain, there are several (greenhouse gas) emissions reduction planning pathways that support net zero by 2050 in line with commonwealth and Northern Territory emissions targets.”

The ECNT’s Kirsty Howey has labelled the development ‘an atrocious use of public funds’. Picture: Glenn Campbell

ECNT executive director Kirsty Howey said the project was “already an atrocious use of public funds” which the documents revealed “rests on the flimsiest of business cases”.

“Energy Minister Chris Bowen has spoken on the world stage about phasing out fossil fuels, while the Australian government plans to pour $3.5b into a mass fossil fuel expansion that is key to opening up multiple onshore and offshore gas projects in the NT,” she said.

“Australia should be investing in renewables in the NT, creating thousands of jobs and lowering the cost of living in the process.

“We’re calling on the Australian government to dump this massive fossil subsidy and redirect the money to things that actually will improve the lives of people living in the Territory.”

Chief Minister Natasha Fyles said Middle Arm was “built on renewable energy and low emissions and those that say otherwise are lying” but did not specify whether she was referring to the Territory public servants who wrote the submission or someone else.

“Middle Arm will create 20,000 jobs and I am focused on delivering these jobs,” she said.

“There are currently five proponents of Middle Arm, four of which are based on critical minerals and solar power.

“We can’t also forget that natural gas is needed to keep the lights on and a transition to a net zero future.”

A spokeswoman for federal Infrastructure Minister Catherine King said the commonwealth would invest $1.5b in equity “into common user marine infrastructure” at Middle Arm.

“It is not targeted at one industry over another,” she said.

“It offers opportunities for a range of industries including gas, green hydrogen and renewable storage, as well as advanced manufacturing, carbon capture and storage, minerals processing and other land uses.”