Court stalls Santos pipeline amid gas project dispute

The Federal Court has extended a ban on Santos from laying a key gas pipeline, critical to its $6.7 billion Barossa gas project near the Tiwi Islands, as the energy major continues its tussle with traditional owners opposed to the project.

Justice Natalie Charlesworth granted the injunction on Wednesday, which will remain in place until a further hearing, possibly in January.

Santos boss Kevin Gallagher declined to comment on the injunction and its implications on the gas project. However, he took a swipe at environmental activists, saying that they were exploiting loopholes in the legal system to launch litigation aimed at stopping new oil and gas projects.

Santos chief executive Kevin Gallagher says activists are gaming the legal system.Credit: Ben Searcy

“The litigation against Santos is not funded by traditional owners or Indigenous communities, but by the Environmental Defenders Office, as we understand it, the sourcing of these are government grants, non-transparent donations and other opaque arrangements.

It’s time to call this out,” he said.

“It is very clear that the regulatory system for offshore projects administered by the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) can no longer be relied upon.

Only five environmental plans have been approved this year, one of them has been overturned by the courts and approvals are now taking almost two years,” Gallagher added.

The extended ban covers a specific part of the pipeline, and Santos can install the 262-kilometre pipeline in other areas. However, it runs the risk of its efforts rendered useless if the Federal Court continues to deny it access to the disputed area.

The Adelaide-based oil and gas producer has claimed in a court submission that the Barossa project could become “untenable” if the court rules in favour of Tiwi Islanders.

Simon Munkara, a member of the Jikilaruwu clan, wants the court to stop Santos from installing the pipeline that will pass within seven kilometres of his land until the company develops a new plan to avoid what he believes will be damage to his cultural heritage.

Santos was about to start work on the pipeline in January before the regulator NOPSEMA directed it to stop until concerns there could be Indigenous heritage sites along the route were addressed.

The action followed a Federal Court decision in September 2022 that stopped drilling of the Barossa gas field. The court found Santos had not adequately consulted Tiwi Islands’ traditional owner Dennis Tipakalippa when it prepared an environment plan for submission to NOPSEMA.

When Santos lost an appeal to the full Federal Court in December last year, the offshore oil and gas industry was thrown into turmoil and most companies withdrew plans submitted to NOPSEMA so that more consultation could be done.

Protesters gather in November 2022 outside the Federal Court in Melbourne during Santos’ bid to restart drilling for the Barossa gas project.Credit: Getty

So far, Santos has maintained its problems with environmental approvals had not increased costs or delayed the first production, targeted for the first half of 2025. However, the court’s latest decision could upend those assurances.

“Without the pipeline the production licence held by the Barossa joint venture is worthless, and the significant investment in the Barossa Gas Project to date ... together with the anticipated profits, will be lost,” Santos’ statement said.

Santos and its partners – South Korea’s SK Energy and Japan’s JERA – have spent about $3.1 billion so far on the Barossa project after giving it the go-ahead in March 2021. Santos shares closed 1.1 weaker at $7.20.

At the heart of the case is whether the pipeline would damage Indigenous artefacts or interfere with cultural values.

Simon Munkara’s court statement said three clans have spiritual and cultural connections to the area as their ancestors once lived there, it was home to Dreaming and ancestral spirits, and its marine life that Tiwi people fished and hunted was culturally important.

A 2020 study cited by his lawyers concluded that the pipeline route would have supported human occupation 30,000 to 50,000 years ago. Santos argues studies it commissioned have put paid to these concerns.

It has also disputed the standing of Munkara and his supporters to speak on behalf of other Tiwi Islanders.

“The means by which that small proportion of a wider population has been identified is left unexplained,” Santos said in a statement.

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