Santos Ltd. may be facing an extended delay before it can proceed with its $3.6 billion Barossa project to extend LNG exports from northern Australia after a federal court denied an appeal.

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The Barossa project, sanctioned last year, is intended to provide more gas supply for the 3.7 million metric ton/year Darwin LNG terminal, possibly extending its lifespan. The terminal is fed by volumes from the Bayu-Undan field, which has been gradually declining. Santos operates Barossa as a part of a joint venture with partners Jera Co. Inc. and South Korea’s SK E&S Co. Ltd.

The federal court sided with a group of indigenous Tiwi Island residents that argued traditional owners were not properly consulted before approval was given last February.

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