Australia regulator warns Santos over Barossa project non-compliance

Australia's offshore petroleum regulator has warned Santos over continued non-compliance at its Barossa gas project, after inspections found concerns about fuel use and gas burn-off. The warning relates to the multi-billion-dollar development offshore from Darwin, where gas from the Barossa facility is sent to Santos's LNG plant on Darwin Harbour. The regulator said the issues had still not been resolved after a later offshore inspection in the Timor Sea.

In a letter seen by the ABC, the National Offshore Petroleum Safety and Environmental Management Authority said it had issued Santos with a warning after an inspection of its onshore gas storage facility in Darwin Harbour in March. Inspectors said key parts of the company's environment plan were not being implemented in relation to fuel management and flaring, which releases carbon dioxide into the atmosphere. The letter said there needed to be a greater focus on compliance, and that the later inspection showed the same issues had not been addressed.

NOPSEMA said the warning followed findings that Santos was not adequately setting, monitoring and managing fuel use and flare performance in line with its environment plan commitments. The regulator said both fuel use and flaring were above the estimates outlined in the plan for the hook-up and commissioning phase. It also said ineffective management of environmentally relevant equipment could point to a broader systemic issue.

Santos said it had engaged with the regulator to agree a forward plan and actions based on the outcomes of the onshore and offshore inspections. The case matters because Barossa is one of Australia's major gas projects and has drawn scrutiny over emissions and pollution. Economists and environmental campaigners have accused Santos of ignoring the problem, arguing that continued non-compliance could lead to higher than expected emissions.

The regulator's concerns also come at a sensitive stage for the project, as hook-up and commissioning work is under way and performance at this stage can shape future operating standards. Santos is one of Australia's largest oil and gas companies, and Barossa is central to its offshore gas plans. The project sits about 300 kilometres north of Darwin in the Timor Sea, linking offshore production with onshore processing infrastructure on Darwin Harbour.

The regulator's letter suggests the issue is not limited to a single inspection, but may involve wider management problems across equipment and environmental controls. What remains unclear is whether the regulator will take further enforcement action or whether Santos's forward plan will satisfy NOPSEMA. The company said it had not faced enforcement action over Barossa and had not received a notice of non-compliance, while the regulator has not said publicly what steps may follow.

The next point to watch is whether the company can demonstrate that fuel use, flaring and related equipment management are brought into line with its approved environment plan.

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