NT Taxpayers May Pay $75m if Fracking Project Fails

Topic: Oil and Gas

The Northern Territory might have to pay $75 million if Tamboran Resources fails to complete its fracking project.

In short:

The NT government will have to pay $75 million if Tamboran Resources cannot pay back its loan for the Beetaloo Basin fracking project.

This was mentioned in the NT budget as a possible expense.

What's next?

Gas from the Beetaloo Basin is expected to be available in the NT market later this year.

NT taxpayers might have to pay $75 million if a key company in the Beetaloo Basin fails to complete its fracking project.

The NT budget shows that the government has agreed to pay $75 million if Tamboran Resources' project fails and other companies cannot pay back the loan.

The NT government has promised to pay $75 million to Tamboran Resources' lenders if the company's project fails.

Tamboran Resources is the biggest company in the Beetaloo Basin and is expected to produce gas for the NT market later this year.

The NT government has previously talked about gas supply agreements with companies fracking in the Beetaloo Basin.

The guarantee was announced in September when the NT government made agreements to get new gas from the Beetaloo Basin.

The agreements include a guarantee from the NT government for up to $75 million of Tamboran's $90 million share of the $180 million loan for the Sturt Plateau compression facility.

A Tamboran spokesperson said the company is confident that the guarantee will not be needed because the construction of the facility is on budget.

The NT's debt will increase to $12.55 billion, with record spending on health and crime prevention but no new help with the cost of living.

The guarantee from the NT government was necessary to get the loan for the construction of the processing facility, which is needed to deliver gas to the NT network.

The CLP government has said that gas supply agreements with Tamboran and Beetaloo Energy are important for the territory's energy needs.

The Power and Water Corporation has been buying emergency gas from LNG exporters to keep the lights on after Eni's Blacktip gas field started to run out in 2021.

Guarantee unusual, economist says

Charles Darwin University Emeritus Professor Rolf Gerritsen said the guarantee from the NT government is unusual.

Rolf Gerritsen says the guarantee is unusual.

Professor Gerritsen thinks the guarantee is a way to get the project moving faster rather than a serious budget commitment.

The guarantors for Tamboran would be companies with a lot of money, so it's unlikely that the NT government will have to pay.

Professor Gerritsen said the guarantee was a way for the NT government to speed up the project.

Environment Centre NT executive director Kirsty Howey said the $75 million guarantee for Tamboran raises concerns about the project's viability.

Kirsty Howey says the guarantee hints at economic risks linked to the fracking project.

It's unusual for a government to guarantee a fracking project that can't stand on its own.

It shows that the project is high-risk economically and also a risk to the people of the Northern Territory if Tamboran defaults on the loan.

It's unusual for the government to support a highly risky project that can't get funding on its own.

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