Santos gas project faces financing delay

An international bank has delayed its financing decision over a massive gas project in the Northern Territory, traditional owners opposed to the venture say.

The Indigenous group, from the Tiwi Islands and Larrakia country, launched a legal challenge in March to stop Santos from borrowing about $1 billion from South Korean banks for the Barossa offshore development.

They say one of the export credit agencies, the Export-Import Bank of Korea, has delayed financing the project, which involves building an undersea pipeline some traditional owners object to.

In an email sent to AAP on Thursday by the Environment Centre NT (ECNT), Korean National Assembly member Jang Hye-Young said the Barossa project could face an uncertain future.

"Not only is the Barossa gas project more polluting than other existing gas fields, but it also faces business uncertainty with its incomplete (carbon dioxide capture and storage) scheme and plummeting long-term (liquid natural gas) demand," she said.

"Hence, (the Export-Import Bank of Korea) must take a step further and withdraw their support for the Barossa project, beyond withholding its investment decision."

Santos, the nation's second-largest independent gas producer, approved the $3.6 billion Barossa offshore development in 2021, making it the largest private economic investment in the territory since Inpex's Ichthys gas project decision in 2012.

It is expected to produce about 3.7 million tonnes of LNG annually and provide export revenue and business opportunities for the NT's cash-strapped economy.

It includes a pipeline from the Barossa gas field in the Timor Sea to an existing LNG facility on Darwin Harbour, which is scheduled for an $800 million refit.

The two projects are expected to generate about 600 jobs during construction and another 350 at Darwin LNG over 20 years.

Santos said in March the project was on budget and on schedule, and had all necessary approvals following consultation with key stakeholders.

Jikilaruwu man Daniel Munkara said Santos did not fully explain its plan to build the gas pipeline or obtain free, prior and informed consent.

He said the court action was a bid to protect the Indigenous families and their way of life on the land.

Other elders are concerned about the pipeline's proposed route through the protected Oceanic Shoals Marine Park, near the Tiwi Islands northwest of Darwin.

The say construction, dredging and increased shipping will disturb seabeds, mangroves and turtle nesting on beaches.

ECNT says the project is expected to produce about 15 million tonnes of greenhouse gas emissions a year, the equivalent of three million passenger cars.

Lawyers for the group filed an injunction in the Seoul Central District Court in March under the Korean Civil Execution Act against the Export-Import Bank of Korea and Korea Trade Insurance Corporation.

Korea is Australia's third-largest market for liquefied natural gas after Japan and China, with exports worth an estimated $3.3 billion in 2020, according to the Department of Foreign Affairs and Trade.

The Export-Import Bank of Korea has been contacted for comment. Santos declined to comment further.

Austrlaian Associated PressBack to Breaking News

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