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The NT's economic growth is 'heavily influenced' by the Barossa gas project, but its future is increasingly uncertain

Santos's Barossa project is a $4.7 billion investment that will extract gas from under the Timor Sea, 300 kilometres north of Darwin. (Supplied: ConocoPhillips)

Northern Territory Treasurer Eva Lawler's recent budget projected the territory to return to surplus by 2026-27. 

But that surplus hinges on Santos' $4.7 billion Barossa gas field off the coast of the Tiwi Islands going ahead — the future of which the treasurer has previously called "concerning".

"If the Barossa project doesn’t eventuate, that will impact the economy of the Northern Territory," she said.

"Around the Barossa, it is concerning where that is, but we do also need to look at other projects that we're involved in whether that's Arafura Resources, whether that's the onshore oil and gas industry, the defence industry in the Northern Territory, [or] rockets in Arnhem land."

The Barossa gas project — the largest private investment in the Territory since Inpex's Ichthys gas project — could rake in millions in royalties for government spending on health, housing, or education, but it faces some uncertainty.

Tiwi Mayor and senior elder Pirrawayingi Puruntatameri says traditional owners will never back the project. (ABC News: Roxanne Fitzgerald)

Costs are expected to rise significantly under changes to the federal government's safeguard mechanism.

The project also doesn't have the support of traditional owners from the Tiwi Islands, who last year won a federal court case against the gas giant arguing they weren't consulted about the company's plans to drill for gas and pipe it through Tiwi sea country to Darwin for export.

The recent budget papers posit the Territory's economic growth as "heavily influenced by the timing of activity associated with the Barossa project".

Santos declined an interview with the ABC and did not respond to questions, but at a recent AGM Santos chief executive Kevin Gallagher said the Barossa would deliver low cost gas to Japan and Korea on time, by mid-2025. 

But economist Rolf Gerritsen said that even though the war in Ukraine has somewhat ramped up demand for gas, he doubts the project will go ahead on time.

"Take everything any government says with a grain of salt," he said.

He said the government's "optimistic" assumptions about the Barossa project lift business confidence and encourage investment, but might not play out as hoped.

"If you're asking me as an economist, I'd say yes, there is a market for gas," he said.

"But if you're asking me as a person who is concerned about the world that my grandchildren will inherit … then you can probably have concerns."

Bruce Robertson, a financial energy analyst at the Institute for Energy, Economics and Financial Analysis (IEEFA) takes a harder stance.

He said it was "incredibly risky" for the government to hedge its bets on a project facing significant headwinds.

Rolf Gerritsen, a research fellow at Charles Darwin University, says he "suspects the economics of the project are quite good" because of Russia's war against Ukraine. (ABC News: Xavier Martin)

Mr Robertson said it would be difficult for Santos to get the project off the ground by its target of 2025 as it doesn't have crucial contracts signed off.

If it did, he said it would be entering a market glut as big productions start up in America and Qatar.

"These countries produce gas at far cheaper prices than we'll ever be able to," he said.

On top of that, he said the use of gas had halved in Australia since 2014 and would continue to fall another 35 per cent over the next decade.

Fierce opposition

Santos has been visiting the Tiwi Islands to try to win fresh approvals for its revised environment plan and carry on with the project as planned.

Mr Gallagher told shareholders at the most recent AGM that requirements from the regulator National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) to further investigate potential First Nations underwater cultural heritage along the pipeline route was taking place. 

Antonia Burke says the government's promise of jobs shouldn't outweigh the rights of traditional owners.  (ABC News: Roxanne Fitzgerald)

And experts were meeting Tiwi Island residents in an effort to understand their spiritual and cultural connections to any underwater cultural heritage features. 

But Antonia Burke, who grew up on the Tiwi Islands and has been leading a major campaign against the Barossa, said traditional owners "will never be on board with the project".

"It will completely disconnect us from our cultural and spiritual way of being."

Asked how she would feel if the NT economy slumped as a result of opposition to the project, Ms Burke said the government should "find another industry".

"Why is the NT government sacrificing the lives of 2,500 [Tiwi Island residents]," she said.

Tiwi Mayor and senior elder Pirrawayingi Puruntatameri said it wasn't a concern for traditional owners if the government missed out on the projected windfall.

"It's okay if the government will not have any money from this project … so be it," he said.

"We're only here to fight for what we believe is the right thing for us and our people and future generations."

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