Santos poised for new gas drilling in Northern Territory's Beetaloo basin

Santos could begin new drilling for gas in the Northern Territory’s Beetaloo basin within weeks after the Finocchiaro government granted approval for up to 12 wells.

The decision, published late last month, has prompted calls from environment groups for the federal environment minister, Murray Watt, to use his powers to “call in” the development for an assessment of its potential effects on water and threatened species under national nature laws.

Environment Centre of the Northern Territory (ECNT) executive director Kirsty Howey said she was concerned “the project is a gateway to full-scale fracking in the territory” after years of relatively slow development in the Beetaloo region south of Katherine and would add to the climate crisis.

The Territory chief minister, Lia Finocchiaro, told a recent industry conference she was pleased some projects in the basin, such as Beetaloo Energy’s operations, were getting closer to production and Territorians were excited at the prospect of powering their beer fridges with Beetaloo gas.

Santos’ project at Tanumbirini Station, a 5,000 sq km cattle station where it has existing exploration wells, would involve 12 new appraisal wells. Appraisal wells are drilled to assess the quality and commercial potential of the gas resource. At full production, fracking projects can involve dozens, hundreds or even thousands of wells.

A company spokesperson confirmed Santos planned to begin drilling in the second half of the year, with the month still to be determined.

Chief executive Kevin Gallagher told investors last week Santos was prioritising its Beetaloo operations ahead of some other domestic projects and considered its acreage in the region a “phenomenal resource” that “could supply the east coast market for more than 50 years”.

The ECNT and the Australian Conservation Foundation called for the project’s impacts on the environment to be assessed under national nature laws.

“Minister Watt needs to do his job and ensure that Santos’ largest ever fracking plan is assessed under our federal environment laws,” Howey said.

“That means considering the impacts of toxic fracking chemicals on waterways like the extraordinary Hot Springs Valley, and on iconic species like the critically endangered northern blue-tongue skink and the endangered Gouldian finch.”

ACF climate campaigner Meg Woods said “gas damages the climate and the local environment”. She pointed to a 2023 analysis by Climate Analytics, which found fracking across the Beetaloo could lead to 1.2bn tonnes of greenhouse gas emitted over 25 years.

“We urge Minister Watt to call in this project so its impacts can be properly assessed under Australian law,” she said.

Separate modelling by energy consultancy Springmount Advisory, commissioned by the two groups, also examined the potential cost of gas from the Beetaloo basin generally. It found gas from the region could be up to two-and-a-half times more expensive than gas from existing Queensland fields, despite being touted as a potential domestic solution to gas shortfall concerns on the east coast.

The report’s author Tom Quinn analysed government gas basin statistics, including Australian Energy Market Operator data and the Future Gas Strategy, and public statements by gas and pipeline businesses about the Beetaloo basin.

“The only way the project economics for Beetaloo work is for export market demand rather than domestic market demand,” Quinn said.

Comment was sought from Watt and Santos.