Santos share price wobbles as federal court stirs uncertainty on Barossa pipeline

Santos has responded to the latest federal court ruling on its stalled $5.8 billion Barossa gas project pipeline.

| More on:
Worker inspecting oil and gas pipeline.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Santos Ltd (ASX: STO) share price is dipping into the red today.

Shares in the S&P/ASX 200 Index (ASX: XJO) oil and gas stock closed yesterday trading for $7.20. In morning trade on Thursday, shares are swapping hands for $7.18 apiece, down 0.3%.

For some context, the ASX 200 is down 0.2% at this same time.

This comes as Santos responds to yesterday's federal court ruling on the stalled construction of the pipeline for its $5.8 billion offshore Barossa gas project, located in the Timor Sea.

How did the ASX 200 energy stock respond?

On 2 November, we reported on the latest headwinds facing the Santos share price.

This came after the federal court suspended work on the Barossa pipeline until it could hear arguments from three Tiwi Island elders. They want the project scrapped, claiming the undersea construction work could destroy ancient, culturally sensitive sites.

Environmental Defenders Office lawyer Fiona Button, representing one of the plaintiffs, Simon Munkara, sought a full injunction from the court in October.

Yesterday the court made an initial ruling on the project, which is meant to supply Santos' LNG plant in Darwin.

Santos replied that it "notes the decision of the Federal Court of Australia today ruling pipelay activities can commence on an 86 kilometre section of pipeline for the Barossa Gas Export Pipeline".

The pipeline, however, is 262 kilometres long.

And Santos said, "As per the ruling, no activity will occur south of kilometre point 86."

Not until the court makes its final decision, in either case. That hearing is now set to commence on 4 December.

Santos said it "intends to vigorously defend those proceedings".

The ASX 200 energy company reiterated that it is committed to delivering the Barossa Gas Project, and it is still targeting production in the first half of 2025.

According to Santos:

With the Barossa Project set to supply the Darwin LNG plant for years to come, it is important for local jobs, as well as opportunities for traditional owners, exports, and relationships with investors and gas customers in Asia, that this project continues.

Justice Natalie Charlesworth noted that any work Santos does might prove "futile" if the remainder of the pipeline construction is blocked.

Indeed, should the final ruling go against the company, it could have a material impact on the Santos share price.

According to Charlesworth (quoted by The Australian Financial Review), "To my mind whether Santos should proceed with the works north of the defined point in the face of the present uncertainty is a decision for Santos to make."

Tiwi elder Molly Munkara sounded elated by the court ruling, saying, "I was calling out to ancestors all this week asking to protect our waterways, marine life, Sea Country. I asked for them to stop Santos, and they listened."

Australian Energy Producers CEO Samantha McCulloch had a different reaction.

"The economic and energy security of Australia and its valued international partners is being damaged," she said of the latest legal wrangling.

Santos share price snapshot

The Santos share price has gained 2% so far in 2023.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Energy Shares

Two fists connect in a surge of power, indicating strong share price growth or new partnerships for ASC mining and resource companies
Mergers & Acquisitions

Santos share price rockets 11% on confirmed Woodside merger talks

A merger between Santos and Woodside would create an Aussie oil and gas company of unprecedented scale.

Read more »

Oil worker using a smartphone in front of an oil rig.
Energy Shares

Big oil: Are Woodside shares about to swallow up Santos?

Could Woodside be about to get even bigger?

Read more »

sad looking petroleum worker standing next to oil drill
Energy Shares

Woodside shares tumble as oil price plunges to five-month lows

Woodside shares have come under pressure with Brent crude oil prices falling 23% since late September.

Read more »

two men in mining hats shake hands on a deal with gas pipelines in the background, indicating a deal between Senex and 29 Metals
Share Gainers

Guess which ASX All Ords share just leapt 59% on a new gas discovery

Investors are bidding up the ASX All Ords energy share following a significant gas discovery in southern Africa.

Read more »

Kid on a skateboard with cardboard wings soars along the road.
Energy Shares

Why is this ASX hydrogen stock up 28% today and over 100% in a month?

This small-cap stock has been catching the eye in recent weeks.

Read more »

Close up of a sad young woman reading about declining share price on her phone.
Energy Shares

Why is the Boss Energy share price sinking 5% today?

This uranium share is raising funds. But why?

Read more »

Natural gas plant engineers using laptop
Energy Shares

Buying Woodside shares? Here's how the ASX 200 energy stock is expanding in Mexico

Woodside’s new LNG agreement will expand its access to key Asian energy markets.

Read more »

a man in a suit holds up a hand and a stop sign at a roadblock positioned over a bitumen road .
Capital Raising

Why are Boss Energy shares in a trading halt?

This uranium share is raising funds. But why?

Read more »