Australian court allows Santos pipeline to proceed after dismissing Tiwi Islanders’ case

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

An Australian court has dismissed an attempt by members of the indigenous population of the remote Tiwi Islands to block a new gas pipeline being built by oil and gas major Santos, ruling that it would not endanger the cultural heritage of the Timor Sea region.

The legal challenge to the Barossa development, which has an estimated $2.7bn construction cost, had disrupted the establishment of the pipeline, which is one of Australia’s biggest new offshore gas developments.

Members of the Tiwi Islands community successfully challenged the planning permission granted to Santos in 2022, and a new challenge to Barossa launched last year has left the project in suspension.

A judge ruled on Monday that the pipeline could go ahead, sending shares in Santos, which is in talks with rival Woodside over a merger, up more than 2 per cent. The project is intended to transport natural gas from the Timor Sea to a terminal in Darwin in Australia’s north, before being shipped to Asia for use.

South Korea’s SK E&S holds a 37.5 per cent stake in the project while Japan’s Jera — a joint venture between Japanese utilities Tokyo Electric Power and Chubu Electric Power — has a 12.5 per cent stake.

The case was brought last year by Simon Munkara, an indigenous man who was later joined by other claimants and argued that the gas pipeline would damage the “sea country” around the islands.

The case alleged that the development had not done enough to address the risk to sites of cultural significance to the indigenous community, with the pipeline set to pass through the territories of ancestral beings Ampiji, a rainbow serpent who is caretaker of the sea, and Jirakupai, or the “Crocodile Man”, who could be angered by the disruption.

Justice Natalie Charlesworth ruled that those “intangible” claims were not shared by all Tiwi Islanders and that the arguments were thus “insufficient”. She also ruled that there was a “negligible chance” of damage to tangible cultural heritage such as archaeological items on the seabed. The case was thus dismissed.

Santos said in a statement that it welcomed the ruling and would continue pipe laying in accordance with its environmental plan. A ruling against the Australian company could have delayed production, due to start in the first half of 2025, by at least a year.

RBC Capital Markets analyst Gordon Ramsay said: “This decision represents a crucial step forward in the execution of the project, lifting one of the major legal hurdles that had been impeding its development.”

The Environmental Defenders Office, which represented Munkara, did not immediately respond to the judgment.

The Australian government has kicked off a review of offshore development project consultations to clarify requirements around environmental and traditional landowner obligations, and guard against a loss of confidence from investors.