Utility's cyclone-damaged gas platform fuels financial problems

A major gas platform off the Northern Territory coast remains closed nearly a year after receiving cyclone damage, forcing the power utility to buy emergency gas well above market rates to keep the lights on.

The NT's Power and Water Corporation (PWC) has lost more than $500 million over three years, according to its 2025/26 financial report, with a $233 million pre-tax loss last year, up from $173 million the year prior.

The document attributed poor performance to "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".

Eni's Blacktip gas field was meant to supply the NT's energy needs until 2031, Blacktip gas problems and was closed after Tropical Cyclone Fina last year.

The matter has been the subject of a long-running legal battle, with PWC seeking damages from Eni "for losses incurred as a result of the reduced gas supply".

PWC's report said the case had been referred to arbitration and "proceedings have been positive," noting the recovery of any losses "remains dependent on the outcome of the arbitration process".

Blacktip's malfunction created a shortfall that has forced the government to buy emergency gas from exporters Santos and Inpex at much higher prices, to ensure supply.

Energy analyst Rick Wilkinson said the two LNG exporters were providing "about a third of the Northern 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," Mr Wilkinson said.

While Blacktip gas supply, Mr Wilkinson said it would be closer to gas prices in Japan, which are three times higher than Australian prices.

He said both exporters must also meet existing obligations to their offshore customers.

"The problem is they don't have enough gas to fill the ships and make their own LNG contracts that are in Japan and North Asia," Mr Wilkinson said.

Before Blacktip started malfunctioning, PWC's gas division profited from selling excess gas on the wholesale energy market.

Gas was historically exported to the east coast using 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 per cent, citing inflation and the rising cost of subsidies linked to the gas supply challenges.

At the time, NT Treasurer Bill Yan said gas expected to be supplied from the Beetaloo Basin in the second half of 2026 would come at "good rates".

Cyclone-damaged platform still offline

Data from the Australian Energy Market Operator (AEMO) shows no gas has flowed through the Bonaparte pipeline connecting Blacktip to the NT gas network for at least three months.

In a statement identical to one provided to ABC Rural in January, a spokesperson for Eni said "Blacktip facility is currently shut in, as the platform was hit by Cyclone Fina".

"Force Majeure has been declared while repairs and activities to restart production are on-going," the statement said.

Mr Wilkinson said the facility's issues started several years ago, and the cyclone was not entirely to blame.

"I think the cyclone was a good reason to shut down and stop and think about it all, but it's not the sole reason for the shortfall," Mr Wilkinson said.

"It's our view that the amount of reserves has been well short of what they expected when they kicked off the project, so they've had some technical difficulties and clearly they can't meet the production requirements of the NT."

Mr Wikinson said at the peak of its productivity, Blacktip was providing about two-thirds of the gas for the Northern Territory, while the remainder came from central Australian gas suppliers.

In a statement, PWC said the Territory's gas-fired generators were currently "wholly supplied" from suppliers other than Eni, and that its current supply arrangements were "sufficient" to service Territory Generation's supply requirements for the foreseeable future.