In a significant setback for Santos Ltd (ASX:STO), the Federal Court has blocked the start of the installation of an undersea pipeline for its $5.3 billion Barossa project. The court's decision, aimed at protecting cultural heritage, casts uncertainty over Santos's schedule to first gas production by early 2025.
Justice Natalie Charlesworth granted the injunction following an application by Simon Munkara, a traditional owner from the Tiwi Islands. Munkara's lawyers contended that the 262-kilometre pipeline posed a severe threat to the Indigenous community's connection to their marine environment. The full case is scheduled for a hearing on November 13.
Santos said that while the ruling does not yet alter the project's timeline, developments following the November hearing will be crucial. The company's share price declined by 3% to $7.51 in response to the ruling.
A series of challenges
The injunction is the latest in a series of challenges for Santos, which saw activities suspended after failing to consult Indigenous communities adequately.
The company awaits a decision from the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) on its revised environmental plan before it can proceed.
Santos CEO Kevin Gallagher previously expressed concerns over the financial impact of project delays. The Barossa project is integral to Santos's growth, with plans to channel gas from the Timor Sea to the Darwin LNG facility and potentially to international markets.
Alina Leikin of the Environmental Defenders Office, representing Munkara, expressed relief at the decision and anticipates further court action to ensure Santos submits a revised environmental plan.
Santos must now navigate the legal process, with broader implications for the Australian oil and gas industry's approach to environmental and cultural consultations.