Santos will be able to begin work on its gas export pipeline in the Timor Sea, apart from a specific area, after the Federal Court ordered a qualified injunction.
In early November the court granted Tiwi traditional owner Simon Munkara, a Jikilaruwu man, an urgent temporary injunction against Santos' construction of the Barossa export pipeline.
Mr Munkara argued the company had not properly assessed submerged cultural heritage along the route of the pipeline, which runs within 7km of Cape Fourcroy on Bathurst Island.
The case returned to court on Monday, when Mr Munkara's legal representatives, the Environmental Defender's Office, argued for a continuation of the injunction until a full trial of the case could take place.
Justice Natalie Charlesworth on Wednesday said while she was satisfied there should be a further order restraining works on the pipeline, that should not apply to the entire route.
Justice Charlesworth said the risks to important cultural heritage sites were greater the closer the pipeline route was to the Tiwi Islands, including to songlines.
"However, I do not consider that the evidence should be understood as asserting connection to all areas of the sea, no matter how far distant from the Tiwi Islands," she said.
Environmental Defender's Office special counsel Alina Leikin said the injunction meant important areas of underwater cultural heritage near the Tiwi Islands would be protected while the case was heard.
"The Federal Court has already established that Santos needs to do proper consultation with traditional owners before a valid approval for work can be issued," she said.
"This case is about ensuring that companies properly assess evidence of new impacts and risks caused by their projects when it comes to light in accordance with the law."
Santos' $5 billion Barossa gas project was just hours away from beginning work on the pipeline off the coast of Darwin on November 2 when the court granted Mr Munkara's urgent injunction.
The company plans to extract natural gas from the Barossa field, located in waters about 285km offshore north-north west from Darwin, and transport it through pipelines to an existing liquified natural gas facility in the Northern Territory.
Santos had hoped to begin laying the pipeline in November to keep the project on track for its first gas target in 2025, while waiting for the regulator, NOPSEMA, to approve an updated environmental plan for the drilling activity.
The new injunction, in force until mid-January, when an expedited hearing of the full case is expected to begin, allows Santos to work on the pipeline in an area about 75km north of the Tiwi Islands and further afield.
Mr Munkara argues the pipeline poses a significant new impact or risk to Tiwi underwater cultural heritage that was not assessed in Santos' original environment plan for the pipeline approved by NOPSEMA, the National Offshore Petroleum Safety and Environmental Management Authority.
If a significant new impact or risk arises, the law requires a titleholder to submit a proposed revision of an environment plan to the regulator for approval before work can continue.
Senior Tiwi elder Molly Munkara said she was elated.
"It's really our waterways, our place where we go and have traditional life, we are part of that area, the land and the sea, it means a lot to me," Ms Munkara said.
"I was calling out to ancestors all this week asking to protect our waterways, marine life, sea country.
"I asked for them to stop Santos, and they listened."
