Santos and partners investing $4.7 billion to develop Barossa offshore gas field near Darwin – ABC News

Energy giant Santos is pushing ahead with development for a major new gas fieldoff the coast of Darwin, in what it says is the biggest investment in Australia's oil and gas industry in almost a decade.

The company and its joint venturepartners will pour $4.7 billion into the Barossa gas field project, with promises of hundreds of jobs and an economic boost for the Northern Territory in particular.

Environmental groups say the project is likely to significantly increase Australias greenhouse gas emissions and threaten pristine waterways off the Top End.

But the Commonwealth and Northern Territory governments say the project is a boost for the so-called gas-led recovery and a welcome sign of confidence coming back after last year's dive in oil and gas prices.

The project will draw gas from an offshore field lying 300 kilometres north of Darwin, in Commonwealth waters.

As well as a new floatingproduction facility and new underwater production wells, the project will require a new pipeline connection between the Barossa field and the Darwin LNG processing plant on shore.

Supplied: Santos Limited

There the gas will be liquefied and storedbefore it is exported overseas.

Santos managing director and chief executive Kevin Gallagher said the plant would havethe capacity to produce about 3.7 million tonnes of LNGa year.

He said investment in the project would actually be close to $7 billion with $2.5 billion in local wages and contracts over its predicted 20-year life cycle.

"This is the largest investment in the oil and gas sector in Australia for almost 10 years," Mr Gallagher said.

ABC News: Felicity James

The investment was not a sure thing this time last year Santos put its final investmentdecision on hold as the pandemic fallout crashed through economies around the globe.

Santos said its interest in the Barossa project would soon drop to 50 per cent after sales to South Korea's SK E&S and Japanese company Jera.

Northern Australia Minister Keith Pitt said the investment was a sign "absolutely [of] confidence in the Australian resources industry".

Companies that are investing over $5 billion are obviously confident there's a market, he said.

NT Deputy Chief Minister Nicole Manison said the project, with $800 million set aside for Darwin LNG plant upgrades, would mean jobs, jobs and more jobs for Territorians.

ABC News:Felicity James

Santos said it expected600 jobs would be created during the initial construction phase, which Mr Gallagher said would start ramping up in the second half of this year.

He said the company hadno local jobs targetbut a "majority" would be Darwin-based,in addition to a "specialist" team offly-in, fly-out workers.

The company said 350 longer-term jobs would be based in Darwin when the production phase begins around 2025.

Supplied: NOPSEMA

Environmental groups say there are questions about how emissions from gas projects like Barossa can be balanced with federal and Northern Territory climate targets.

The development was described as a "carbon bomb" by the Australasian Centre for Corporate Responsibility.

Santos has estimated emissionswould total about 3.4 million tonnes per year,under normal operating conditions.

Australia's latest figures put total national emissions atabout 529 million tonnes for the year to March 2020.

A spokesman for Santos said carbon offsets would be required if the emissions exceeded baselines set by the Clean Energy Regulator.

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Mr Pitt said the federal government would ensure Australia's international commitments were met.

"The Commonwealth is committed to meeting its agreements in Paris, they are an international agreement which we have signed," Mr Pitt said.

Gas is being promoted as a 'clean' alternative to coal. Critics say it's nowhere near clean enough.

"Technology is thekey, we will manage our commitments to emissions reduction targets through technology."

Santos and the NT government have not confirmed which jurisdiction is likely to have responsibility for offsetting the emissions.

The project's proximity to the Tiwi Islands and theOceanic Shoals Marine Park is a concern to a coalition of groups including the Environment Centre NT and theAustralia Institute.

ECNTmarine scientist JasonFowler said the project was about 100 kilometres north of the Tiwi Islands and the pipeline would pass by as close as sixkilometres.

"This project will have devastating impacts on biodiversity in the region, including on critical habitat for the threatened Flatback and Olive Ridley turtles," hesaid.

The federal oil and gas industry regulator, the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA), accepted the Barossa project proposal in 2018.

The gas is intended for the international export market.

Mr Pitt said the Commonwealth was still considering submissions to a discussion paper ona domestic gas reservation policy.

ABC News: Felicity James

"Clearly you need the export market to ensure that the capital will flow to these projects Australia's domestic market is not big enough to warrant all of the current projects we have online," Mr Pitt said.

"It is a balance between what we need for exports and what we need for domestic use."

Mr Pitt said WesternAustralia already had a gas reservation policy and Tasmania had a "partial one" and it was"up to the Northern Territory government" what position it would take.

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Santos and partners investing $4.7 billion to develop Barossa offshore gas field near Darwin - ABC News