The Northern Territory government has signed a major deal to buy fracked gas from the Beetaloo basin south of Katherine a year after it gave the green light for production in the region.
The chief minister, Eva Lawler, said the government was “backing the growth of the territory’s onshore gas industry” and had signed a nine-year gas sales agreement with the US company Tamboran Resources.
Climate and First Nations groups have criticised the deal, with the Environment Centre of the Northern Territory (ECNT) describing it as “disgraceful and risky”.
The agreement is for the purchase of 40 terajoules of gas per day from 2026 from Tamboran’s proposed Shenandoah South pilot project, with an option to extend for a further six years out to 2042.
The deal was announced close to a year after the NT government said production could commence in the Beetaloo basin, despite science and energy agencies warning there can be no more exploitation of new oil, gas and coalfields if the world is to limit global heating to 1.5C.
“The gas arrangements, between the territory government and Tamboran Resources, will provide competitively priced gas for the territory’s electricity generation,” Lawler said.
“Once Tamboran secures access to the necessary pipelines and receives all required permits and approvals, supply to the territory government becomes unconditional.
“This historic deal ensures that territory residents, businesses and industry will share in the benefits of our growing on-shore gas industry by delivering cleaner and more affordable natural gas for power generation.”
Tamboran Resources is yet to reach a final investment decision for its project.
In its ASX announcement, the company said it was aiming to reach a final investment decision mid this year, with first production planned for 2026.
“The daily volume under the [gas sales agreement] represents approximately two-thirds of the Northern Territory’s current gas requirements,” the company said.
The deal has been struck despite widespread opposition to fracking in the NT.
Guardian Australia revealed last year that the government knew it could not meet the key climate recommendation from a territory-wide inquiry into fracking, and that it abandoned a proposal for a net zero policy for new gas projects after the industry objected.
The ECNT executive director, Kirsty Howey, said the government had made its announcement before Tamboran had received necessary environmental approvals for production to commence, which she said raised questions about the “independence and integrity” of that assessment process.
“This is a disgraceful and risky deal that amounts to the NT government propping up the business case for a carbon bomb that will set the Northern Territory on a path towards climate collapse,” she said.
“The government should be investing in renewables and storage to shore up our energy security, rather than shackling our economy to a new, utterly unreliable gas source that should have been jettisoned years ago.”
Samuel Sandy, the chair of Nurrdalinji Aboriginal Corporation, said: “We don’t want that fracking on our country.
“Traditional owners are fed up with the big lies told about the job and economic benefits of gas,” he said.
