Idled Gas Platform Deepens Northern Territory Utility's Losses

A gas platform off the Northern Territory coast has been closed for almost a year after cyclone damage. The shutdown is adding to the financial pain of the government-owned Power and Water Corporation (PWC), which has had to buy emergency gas well above market rates to keep the lights on.

PWC's 2025/26 financial report shows losses of more than $500 million over three years. The pre-tax loss last year was $233 million, up from $173 million the year before. The report blamed "high energy costs, following the purchase of emergency gas at elevated prices due to the curtailment of supply by the corporation's main supplier, Eni".

Emergency supply

Eni's Blacktip field was meant to supply the Territory until 2031, but it began drying up in 2021 and was shut after Tropical Cyclone Fina last year. The shortfall has forced the government to buy emergency gas from exporters Santos and Inpex at much higher prices. The price has never been disclosed, but energy analyst Rick Wilkinson said it would be closer to gas prices in Japan, which are three times higher than Australian prices. He said the two LNG exporters provide about a third of the Territory's gas. "There's no question that they've stepped in at a time when without that, there would be blackouts coming through the NT," he said.

He added that both exporters also have obligations to their offshore customers. They do not have enough gas to fill ships and meet their own LNG contracts in Japan and North Asia, he said.

Data from the Australian Energy Market Operator shows no gas has flowed through the Bonaparte pipeline linking Blacktip to the NT network for at least three months. At its peak, Blacktip supplied about two-thirds of the Territory's gas, Wilkinson said. The rest came from central Australian suppliers.

Before Blacktip began malfunctioning, PWC's gas division made money by selling excess gas on the wholesale market. Gas was historically exported to the east coast through the Northern Gas Pipeline, which was later modified to flow in the opposite direction. In June, the NT government raised power prices by 5.3%, citing inflation and the rising cost of subsidies linked to gas supply problems. Treasurer Bill Yan said at the time that gas expected from the Beetaloo Basin in the second half of 2026 would come at "good rates".

Legal fight with Eni

PWC is seeking damages from Eni for the reduced supply. The case has been referred to arbitration, and PWC's report says "proceedings have been positive". Any recovery of losses depends on the outcome.

Eni said Blacktip is shut in after being hit by Cyclone Fina. It has declared force majeure while repairs and restart work continue. Wilkinson said the cyclone was not the only reason for the shortfall. In his view, reserves have been well short of what was expected when the project began.

PWC said the Territory's gas-fired generators are "wholly supplied" by suppliers other than Eni. It described current supply arrangements as "sufficient" for the foreseeable future.

Source: ABC News