Documents obtained by the ABC show the original business case for a "sustainable" development precinct proposed for Darwin Harbour described it as a "new gas demand centre", prompting critics to question the environmental merits of a project that has received $1.5 billion in federal funding.
The 27-page business case, titled "Growing Advanced Manufacturing in the Northern Territory's Middle Arm Industrial Precinct", was submitted by the NT government to Infrastructure Australia in September 2020 in a bid to secure funding from the Commonwealth.
While it referenced plans to manufacture renewable hydrogen and process critical minerals at Middle Arm, its primary focus was on the expansion of the NT's gas industry.
"Successful gas industry development in the Northern Territory will unlock private sector investment and cascade benefits throughout Northern Australia and the Territory's economy," it stated.
The business case also said gas sourced from the Beetaloo Basin — where fracking was expected to begin next year — could create cost-effective options for companies looking to manufacture petrochemicals at Middle Arm.
"The potential recovery of natural gas liquids from the onshore Beetaloo Sub Basin project means there is also an opportunity for future production of ethane-based products such as plastics, paints, polymers and rubbers as well as the production of liquid fuels to help address Australia's energy security," it stated.
"Downstream gas processing in Darwin will create a new gas demand centre and open up opportunities for related industrial development, employment, education and training."
Release of recent economic assessment 'not in public interest'
The 2020 document was released after the ABC submitted a Freedom of Information request to the federal government for any business cases or cost-benefit analyses relating to the Middle Arm precinct.
But the Department of Infrastructure, Transport, Regional Development, Communications and the Arts refused to release separate economic modelling conducted by Deloitte in August this year.
It said doing so would not be in the public interest because it could "prejudice or impair the future flow of information from state and territory governments to the Commonwealth".
Federal independent senator David Pocock — who requested similar assessments at a Senate estimates hearing in October, but was yet to receive them from the federal government — said the NT government's 2020 business case was "deeply concerning".
"This document removes any doubt [that] the Middle Arm development is the key to unlocking gas fields like Beetaloo and Browse that represent a disaster for our climate," Mr Pocock said.
"While the application is more than two years old, it reveals a huge gap between the NT government proposal and what the federal government has been describing as a 'sustainable development precinct.'"
Business case estimated 7,400 jobs by 2036
The 1,500-hectare Middle Arm project is currently being assessed by the NT Environment Protection Authority, with development expected to begin in 2026, once approvals are granted.
Two major gas processing facilities run by Inpex and Santos are already based in the vicinity, but no companies have publicly stated their intention to establish facilities at the proposed precinct so far.
The business case estimated that by 2036, more than 7,400 direct and indirect jobs could be created as part of an advanced manufacturing sector in the NT, with $2 billion in economic benefits linked to the jobs each year.
But despite Middle Arm's economic potential, the business case warned that without access to a publicly funded wharf and an offloading facility, companies were "unlikely to invest in the site in the short to medium term".
"Marine infrastructure and serviced land to support the development of a gas manufacturing and minerals refining hub in Darwin is deficient and investment in enabling common-user public infrastructure will be required to facilitate final investment decisions by gas manufacturing and minerals refining Proponents," it stated.
The business base estimated the required public infrastructure would cost between $1.5 billion and $2 billion.
As part of its federal budget in March this year, the Coalition government agreed to provide $1.5 billion towards the project.
In its own budget in October, the Labor government confirmed it would provide $1.5 billion in planned equity towards common-user infrastructure at Middle Arm, as well as an additional $400 million for associated logistics hubs in regional centres.
At the time, it said the funding would "create a pathway towards a decarbonised economy by helping emerging clean energy industries".
Greens push for renewables only at Middle Arm
The business case said the use of Middle Arm for "advanced gas manufacturing" was strongly aligned with the policies and strategies of both the Australian and NT governments.
It also noted the Territory Economic Reconstruction Commission (TERC) — which was set up by the NT government during the pandemic — had recommended the development of the precinct for various industries, including renewable hydrogen, minerals and low-emissions petrochemicals.
"There are many sectors that could be attracted downstream from a full-scale petrochemicals complex", the business case stated, quoting the TERC's recommendations.
The description is at odds with the NT government's recent deletion of the term "petrochemicals" from its official marketing about Middle Arm, which sparked claims of "greenwashing".
Federal Greens senator Dorinda Cox said Commonwealth funding was effectively being used to subsidise the fossil fuel industry, and called for Middle Arm to be dedicated solely to renewables.
"What the business case articulates is the clear use of gas from the Beetaloo to Middle Arm for the use of petrochemicals," she said.
"What we should be doing is using this as an opportunity to build infrastructure that is about pivoting into the transition of a cleaner, greener new economy."
Governments defend 'sustainability' of Middle Arm project
A spokeswoman for federal Minister for Infrastructure Catherine King rejected the concerns.
"We are investing in common-use infrastructure to give all potential users in the market the opportunity to grow and thrive," the spokeswoman said.
"This is particularly important as new markets to process and export green hydrogen and energy transition components are established.
"This is not a subsidy for fossil fuel."
NT Chief Minister Natasha Fyles said gas would play a critical role in the transition to renewables.
"Gas is a transitional energy source, but we absolutely want to have renewables," Ms Fyles said.
"That's why you're seeing in the Northern Territory those critical minerals being mined [and] huge solar projects coming into the territory."
The Australian Petroleum Production and Exploration Association said the Middle Arm precinct would generate low-emissions energy while securing economic benefits.
"The oil and gas industry will collaborate with authorities on the planned carbon capture utilisation and storage hub at Middle Arm as well as the development of hydrogen, bringing our expertise in cleaner energy technologies crucial to reaching net zero targets," APPEA NT director David Slama said.
