A Darwinian survival story: Barnaby’s northern port is more of a crazy boondoggle than thought

by | Apr 15, 2022 | Energy & Environment, Latest Posts

It would appear that the $1.5 billion gas port that Barnaby Joyce wants to build in the Port of Darwin doesn’t stack up on any measure, potentially laying claim the title of least meritorious pork barrels of the election campaign, writes Callum Foote.

Barnaby Joyce has just thrown $1.5 billion at a project to develop a new port on the middle arm peninsula in the Port of Darwin. This is after the Coalition government sold the Port of Darwin for $506 million in 2016 to a Chinese-controlled company, Landbridge. Port Barnaby is a quid pro quo of sorts for lending his National Party’s support to the Morrison government’s emissions policy.


Joyce is claiming that the new port is needed for defence purposes, despite the Australian Navy having almost completed a brand new wharf at the Larrakia navy base at the entrance to the harbour.

What’s more, the Deputy Prime Minister’s national security claims gain their impetus from the fact that the Port of Darwin was leased to Chinese government-owned Landbridge in 2015 at the start of Scott Morrison’s tenure as treasurer.

The was not without its controversy – even before Australia-China relations soured, as Andrew Robb, a former minister for trade, took an $880,000 consultancy position with the Chinese group immediately following his exit from politics in 2016. Robb only left his position at Landbridge in 2019, shortly before a new foreign-interference law took effect.


What has experts scratching their heads is, among other problems, the location of the proposed port.

To say that the new location is not a prime location for a deep water port is underselling it. The proposed location of the port is further up a shallow mangrove creek from two existing LNG plants.

One of these plants, which uses gas from the Ichthys LNG project owned and operated by Impex, required 19 million cubic metres of dredging to extend the channel. There is also a quartz reef underneath the proposed dredging location which dramatically increases the difficulty and cost of dredging.

This channel will have to be doubled to reach the new port and its proposed five new whares.

In addition, coastal inundation due to rising sea levels is set to cover the whole of the area by 2100. https://www.coastalrisk.com.au/viewer


Jason Fowler, a marine ecologist at the Environment Centre NT who was responsible for the recent injunction in South Korean courts over Santos’ proposed Barossa gas field expansion, says that “Dredging impacts alone will completely destroy the ecology of the south arm.”

Fowler also notes that the proposed Petrochemical Precinct will be constructed within 3km of the Darwin suburb of Palmerston which has roughly 50,000 residents.

Fowler says his team can find no evidence of any similar petrochemical precinct so close to residential areas anywhere in the world. “These precincts cause air, noise and light pollution and with wind potentially blowing pollutants into peoples homes it poses a significant health risk to Palmerston residents,” Fowler says.

It is meant to be the home to a petrochemicals complex (in a coastal inundation zone not far from the suburbs, with a shipping passage that is incredibly tight)

What could possibly go wrong?

What are the economics behind the new port?

According to Bruce Robertson, financial analyst at IEEFA: “The whole concept is reliant on the development of the Beetaloo as a major gas field to feed a Darwin petrochemicals precinct”.

However, the share prices of the companies involved are not too encouraging. Take for example Empire Oil and Gas, which has received large government subsidies of $19.4m for new fracking wells in the Beetaloo Basin.

Another gas company operating in the Beetaloo is Tamboran Resources which floated at 40c and has yet to recover its issue price despite receiving $7.5m in government subsidies. Michael West Media received a defamation threat from Tamboran last year.

These gas companies have failed to realise higher share prices despite gas prices globally having spiked upwards to nose bleed levels.  

LNG in Asia is at extremely high prices of US$35/mmbtu as Europe soaks up all the available LNG to attempt to wean itself off Putin’s gas. According to Robertson “usually high gas prices and heavy government subsidies, would feed through to share prices, however, in this case, they have not, indicating that confidence in the Beetaloo is not high.”

Confidence is not high because as the pressure on the climate ramps up so does the need to take action to reduce our reliance on gas and LNG as a fuel.

“LNG is emissions-intensive. It takes 9% of the input gas to an LNG plant just to cool the gas to -165 degrees C.  Shipping losses are a further 2-6%” says Robertson

Climate risks are seeing customers sign shorter contracts. Typically gas customers signed 20-year offtake agreements.  Due to customer acknowledgement of Climate risks contracts signed more recently from Australian producers have been for a maximum of 10 years.

There does not seem to be a significant business, environmental or national interest case for Joyce’s proposed LNG port.

Callum Foote a journalist and Revolving Doors editor for Michael West Media.
Callum has studied the impact of undue corporate influence over Australian policy decisions and the impact this has on popular interests.

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