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Extending the life of the Darwin LNG operation by opening the Barossa gas field in the Timor Sea will create 300 new permanent jobs and pump $2.5 billion in wages, supply and service spending into the Northern Territory economy over the next 20 years.

The depleted Bayu-Undan field, which has been supplying gas to the Darwin plant for 20 years, will now be used for carbon capture and storage, spearheading a new industry for Australia.

Santos chief executive Kevin Gallagher told a packed NT Energy Club lunch in Darwin that the importance of Barossa and Darwin LNG to the “economic and social fabric” of the NT cannot be overstated.

He said that the LNG operation, which has a 100 percent local workforce, generates about $100 million a year in supply and service opportunities for Territory businesses.

And every four years when the complex carries out its major maintenance shutdown, it brings a further 600 jobs to town and injects up to $50 million into the NT economy through local supply tand service contracts.

The 180 workers at Darwin LNG now will be redeployed in other Santos operations so they can return to work at the plant when the 18-month, $925 million Barossa life extension program is completed – keeping them and their families in Darwin, contributing to the local community and the Territory economy.

“We’re investing because we can see the Territory’s enormous potential,” Mr Gallagher told more than 200 guests at the lunch. “With its natural resources, from solar energy to gas – offshore and onshore – to carbon storage and the minerals needed to drive the energy transition, the Territory is in pole position.

“It has a great harbour and port facilities, an industrial hub at Wickham Point and a vision for the Middle Arm Sustainable Development Precinct.

“It is close to the massive markets of Asia. “And it has great people.”

Mr Gallagher said the billions in wages, service and supply contracts were an opportunity for Territory businesses with direct or indirect links to gas projects to secure their economic futures.

“So, it is important for us all to stand up for and back these projects – and others like them – against misguided activism.”

He said Australia must remain an “active and collaborative member” of the Asian region by using its resources to help our neighbours secure their energy needs and decarbonise their economies.

“However, Australia’s position as a leading and trusted gas supplier for the giant energy-consuming economies of Asia has been in decline recently.

“Our neighbours have been concerned about apparent ambivalence to their energy security and its apathy towards the success and growth of the gas industry, despite the clear role that gas will play in the region for decades to come.

“Therefore, I am pleased to see both federal, and state and territory ministers, taking steps to turn that around.

“According to Wood Mackenzie, Australia’s gas industry will remain important with gas demand in Asia forecast to grow by around 50 percent between now and 2050. So if the gas does not come from Australia – where environmental and safety standards are among the highest in the world – it will come from Russia, the Middle East, Africa or North America.”

Mr Gallagher said that if Australia decided to leave its gas resources in the ground, we would be sacrificing:

  • skilled, secure, well-paid jobs for Australian workers
  • business opportunities for Australian companies
  • he vitality of regional communities such as Darwin, Karratha, Whyalla and Roma
  • our domestic gas supply, which largely depends on export projects
  • Government revenues that fund health and education
  • export income

“We cannot turn off the taps on oil and gas before replacement technologies are technically feasible, affordable and available.

“Fossil fuels still account for around 80 percent of primary energy today – the same as 45 years ago – and peak consumption has not yet occurred. So if we are serious about reducing emissions, we have to be serious about abating emissions from fossil fuels, which is why our Bayu-Undan CCS project is so important.

“As the IEA’s recent World Energy Outlook says, ‘Simply cutting spending on oil and gas will not get the world on track for the NZE scenario.’

“The slower than expected pace of the renewables rollout, the need for firming of renewables to deliver 24/7 power and the lack of demand growth for new fuels, particularly hydrogen, has meant continued strong demand for traditional energy products.

“It has also meant strong demand for carbon capture and storage services, because, as the IEA has said, it will be almost impossible to reach net zero by 2050 without this technology. So I am very pleased that we have recommenced both drilling and pipelaying for the Barossa project.”