SK vows to continue offshore natural gas project in Australia despite legal setback

The Korea Times

Entertainment & Arts

Sports

World

SCMP
Asia

Video

Photos

The Korea Times

Entertainment & Arts

Sports

World

SCMP
Asia

Video

Photos

The Korea Times

Business

Tue, February 7, 2023 | 00:40

Companies

SK vows to continue offshore natural gas project in Australia despite legal setback

Posted : 2022-12-04 16:51

Updated : 2022-12-05 16:35

Seen is a marine gas field in Australia's northern coastal waters. Courtesy of SK E&S

By Baek Byung-yeul

SK E&S, a natural gas provider of SK Group, said Sunday that the company will make efforts to carry out its offshore natural gas field development project in Australia even though the Federal Court of Australia ruled in favor of the Indigenous people again in a legal appeal over the gas field involving Australian energy firm Santos.

SK E&S has been participating in the Barossa-Caldita offshore gas field project in Australia together with Santos since 2021 as the company announced it would invest a total of $1.4 billion over the next five years to produce low-carbon liquefied natural gas (LNG) using carbon capture and storage (CCS) technology that reduces CO2 emissions.

SK E&S is a subsidiary of SK Inc., a holding company of SK Group, which holds a 90 percent stake in the company. SK E&S holds 37.5 percent stake in the development project while Santos holds 50 percent stake.

However, the court maintained that Santos did not properly consult with the Indigenous people of the region while carrying out the project even though the procedure is required by law there.

The project has hit a snag as the Indigenous people of the Tiwi Islands in the Timor Sea, through which gas pipelines from the Barossa-Caldita gas field pass, sued Santos, saying that the development project could raise environmental pollution issues and disrupt marine ecology there.

In September, an Australian court concluded that Santos had not properly consulted with relevant parties about the project and the environmental approval by the National Offshore Petroleum Safety and Environmental Management Authority for the gas field permit was invalid, which led Santos to suspend drilling on the project.

Santos appealed the decision, but the Federal Court upheld the September decision.

"We would not, as Santos urged, confine 'interests' to 'legal interests' and reject the proposition that the connection of traditional owners with sea country cannot be an interest for the purposes of [the] regulation," a justice of the Federal Court said in the ruling, according to local Australian media ABC News.

"There was a real potential for Santos' proposed drilling activity to have a potentially significant adverse effect on the marine resources closer to the Tiwi Islands, which were a fundamental part of the traditional culture and customs of the Tiwi Islanders," the justice added.

SK E&S said the company expects Santos will follow the court's decision to take steps to resume the project after engaging in broader communication with the Indigenous Tiwi Islanders.

"As far as we know, Santos has been trying to expand its communications with the Indigenous people there by accepting recommendations of the court," an SK E&S spokesman said.

When asked how long the project will be delayed, the official added, "The process of further communications is added to the business, but this does not mean that the business process is lengthened."

The company added it decided to join the project as part of its green efforts to shift to using low-carbon LNG.

"As renewable energy cannot cover all the energy consumption, we are working on producing low-carbon LNG. We are not trying to harm the environment, but we are trying to be more eco-friendly using our CCS technology," the official said.

baekby@koreatimes.co.kr