As a professional who plies his trade in open water, Peter West understands the importance of keeping a close eye on the horizon.
- Santos plans to spend $ 4.7 billion to develop new gas field near Darwin
- Other major projects proposed for the NT include a $ 22 billion solar initiative and a $ 1.5 billion shrimp farm
- NT economy set to grow at second highest rate in country
But over the past week, Mr West hasn’t just paid attention to the incoming gusts at Darwin Harbor.
He is also considering the potential future financial rewards of a massive project announced by Australian energy giant Santos.
“[When] bigger business is coming to Darwin, everyone is starting to prosper, âsaid Mr. West, managing director of Darwin Tug and Line Services.
Santos and its joint venture partners plan to spend $ 4.7 billion to operate a new offshore gas field, 300 kilometers north of the Top End coast.
The project, which is expected to generate 3.4 million tonnes of emissions per year, will extend the operational life of the Darwin LNG processing plant by two decades..
About $ 800 million has been set aside for the modernization of port facilities.
Mr West – whose company has had to endure the forced suspension of cruise ship travel caused by the COVID crisis – is hoping Santos’ investment will trickle down to smaller players like his company.
Darwin has been in an economic crisis since construction was completed on another major gas development – the $ 55 billion Ichthys LNG project managed by Japanese company Inpex.
âSince this project came to an end, we have seen [the economy] sliding backwards at a reasonable rate of knots to the point where a majority of businesses around the Territory [have] drastically reduced in size, âsaid Greg Ireland, general manager of the NT Chamber of Commerce.
The retractions were largely due to the departure of around 10,000 workers from Inpex, resulting in Darwin’s first population decline in nearly 15 years.
But Santos’ new announcement – including the 600 jobs expected during the initial construction phase – has generated optimism among some business leaders that the city’s economic slump may be over.
âSome of these things are driven by trust,â Mr. Ireland said.
In addition to Mr Ireland’s growing confidence, there are several other large-scale initiatives that have taken small steps to become a reality.
Sun Cable, which hopes to build a $ 22 billion solar farm near Tennant Creek to supply renewable energy to Singapore, filed a development application for a solar panel assembly plant in Darwin last week.
And Seafarms Group, which has yet to make a final investment decision in a $ 1.5 billion shrimp farm known as Project Sea Dragon, last week selected its prime contractor for the potential project. .
Several other significant investments are also planned for the Top End in the short to medium term, including multi-billion dollar defense projects in Darwin and Tindal, a $ 400 million boat lift at Darwin harbor and hydraulic fracturing. in the Beetaloo Basin.
âSo all of these things combined will definitely lead to a significant increase in activity in the territory,â Mr. Ireland said.
The investment pipeline, especially the Santos project, has raised the specter of another Inpex-like boom in Darwin, which is already in the midst of a rapid surge in house prices.
Mr Ireland said such a scenario was not ideal, given the collapse that follows any boom.
Deloitte Access Economics predicts that the territory’s economy will grow by 3% per year over the next five years, the second highest rate of any jurisdiction.
However, Kristian Kolding, who heads the company’s macroeconomic forecasting team, said Darwin was still a long way from the heady days of Inpex.
âI think it’s too early to expect another boom at this point,â he said.
“And it is also very important to put these numbers in perspective.
“So during [Santos’s] An investment of 4.7 billion dollars is a significant investment, it pales in comparison to what has been experienced during the [$55 billion] Inpex investment. “
Nonetheless, Mr Kolding said Santos’ announcement could trigger further investment in the Northern Territory, particularly in the resource sector.
On the port, West is cautiously optimistic about the impact of Santos’ investment.
“This is the start of stabilization,” he said.
“It’s just going to take a while to filter through, and before I see it here.”