Regulator warns Santos over fuel use and flaring at Barossa project

The National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) issued Santos a warning after an inspection of its onshore gas storage facility on Darwin Harbour in March, according to a letter seen by the ABC. Inspectors observed key aspects of Santos's environment plan were not being implemented in relation to fuel management and flaring, which releases carbon dioxide into the atmosphere.

A subsequent inspection of the offshore Barossa facility, about 300 kilometres north of Darwin in the Timor Sea, found the issues had not been addressed. "This exhibition of continued non-compliance, several months after the issues were initially raised, is of concern to NOPSEMA," the letter reads. Inspectors also noted issues with "ineffective" management of "environmentally relevant equipment" that may represent a "broader systemic issue".

A NOPSEMA spokesperson told the ABC the warning followed inspection findings that Santos was not adequately setting, monitoring and managing fuel and flare performance in line with its environment plan commitments, and that both fuel use and flaring were above estimates outlined in the plan for the hook-up and commissioning phase.

In a statement, a Santos spokesperson said the company has not faced any enforcement action from NOPSEMA in respect of the Barossa Project, nor has it received any notice of non-compliance in relation to fuel and flare obligations, including reporting requirements, in the environment plan. The spokesperson said Santos was committed to minimising environmental impacts.

The Barossa project is one of Australia's biggest gas projects and has faced setbacks, including initial delays in gas shipments from Darwin to Asia. Gas from the offshore facility is sent to Santos's Darwin LNG facility, which made national headlines last year when the ABC revealed it had been leaking methane for years. While the leak has yet to be fixed, Santos says the facility poses no safety risk.

Greenpeace Australia Pacific's head of climate and energy, Joe Rafalowicz, accused Santos of "dodging responsibility for its pollution". "Rather than disclosing this information and creating a new environment plan, Santos has continued business as usual and ignored repeated warnings from the offshore regulator," he said. "Just like its leaking gas tank in Darwin harbour, Santos is again leaving the NT community and environment to pay the price."

Kevin Morrison of the Institute for Energy Economics and Financial Analysis said continued non-compliance with flaring and fuel use requirements suggested Santos may be dealing with unanticipated operational issues at the Barossa. "It also means the project's emissions and pollution is higher than forecast," he said. "Barossa is already emissions intensive as it has the highest CO2 concentration in any gas field developed for LNG exports."

John Robert, a chemical engineer and industrial economist with more than 40 years' experience in the oil and gas industry, said penalties should have been imposed. "It's outrageous that a warning by a federal authority can be ignored by an ASX-listed company without any consequences," he said.

In its letter, NOPSEMA said it expected Santos to provide details of steps taken to fix the issues, review its environment plan, and develop a way to track performance. Another inspection was planned for the third quarter of 2026. NOPSEMA did not respond to questions from the ABC about whether that inspection had taken place or whether Santos had resolved the issues.

A Santos spokesperson told the ABC the process outlined in its Barossa Environment Plan (EP), accepted by NOPSEMA, allows Santos to review EP estimates during the lifecycle of the EP. "Santos has engaged with NOPSEMA to agree to a forward plan and set actions in line with the outcomes of the onshore and offshore inspections," they said.