Santos gets final tick for flagship Barossa gas project

First gas on the $5.8 billion mega-project, about 285km north-northwest off the coast of Darwin, is expected in coming months after offshore oil and gas regulator NOPSEMA gave the project its final regulatory approval on Tuesday.

The Adelaide-based company will now be able to hook up a floating production storage and offloading vessel, allowing gas to be transported from the project's six wells to processing facilities.

Pipeline work on the controversial project was halted in late 2022 after a court challenge from three Tiwi Island elders.

Santos eventually won the Federal Court battle in January 2024.

The Environmental Defenders Office - which represented the Tiwi Islanders - was slammed by the judge for confecting evidence in the case and ordered to pay Santos more than $9 million in legal costs.

But the delay of about three months meant the project would incur an extra $US200-300 million ($A311-$467 million) in capital expenditure costs, Santos revealed.

The approval was met with condemnation by environmental groups.

With production capacity of 3.7 million tonnes of LNG per year, critics say Barossa contains a higher proportion of CO2 than any other gas field in Australia.

The Australian Conservation Foundation said the project's environmental plan failed to properly assess greenhouse gas emissions from the "massive climate bomb".

The Environment Centre NT said the approval was a failure of the Albanese government's safeguard mechanism, which requires major emitters to reduce greenhouse gases in line with Australia's climate targets.

Mark Ogge, principal advisor at the Australia Institute, called on Opposition Leader Peter Dutton to strengthen the coalition's gas reservation policy to prevent the need for new projects in the Northern Territory.

"If a small amount of Barossa's gas was reserved for use in Australia, there would be absolutely no need to frack for gas in the Northern Territory," he said.

In a market update in February, Santos reassured investors that the project was 91 per cent complete and on track for first gas in the third quarter of 2025.

Santos said that final welds on a pipeline connecting the Barossa field to the Darwin LNG plant were under way and three wells were drilled and completed.

A fourth was partially drilled and suspended for later completion, with work on a fifth well under way.

Santos shares finished 0.7 per cent lower at $5.61 on Tuesday.

Santos was approached for comment.

Australian Associated Press