Santos gets expedited hearing in appeal to resume Barossa gas drilling

MELBOURNE, Oct 3 (Reuters) - Santos Ltd (STO.AX) was granted an expedited hearing by an Australian Federal Court judge on Monday for an appeal it filed seeking to resume drilling at its $3.6 billion Barossa gas project in waters off northern Australia.

The court discussed dates in November to hear the appeal over two days.

"I formally grant expedition to the appeal," Chief Justice James Allsop told the court.

Allsop said at the latest the hearing would be held on Nov 28-29, "but I've read the affidavits and understand why a week has its importance".

Santos wants the full Federal Court to reverse a decision by a judge to overturn the drilling permit for the Barossa gas project.

The company was forced to stop drilling after a federal court judge on Sept 21 ruled in favour of a challenge brought by Tiwi Islanders who said Santos had not properly consulted the traditional owners about the drilling which they said posed a risk to sacred sites and spiritual connection to Sea Country.

Affidavits related to expediting the hearing filed by Santos, Tiwi Island land owner Dennis Tippakalippa's lawyers and the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA), which granted the drilling permit, were not open to the public.

Santos aims to start producing gas from the Barossa project in 2025 to feed its Darwin liquefied natural gas (LNG) plant. The plant's current gas source, the Bayu Undan field in the Timor Sea, is set to stop producing later this year.

UBS analyst Tom Allen predicted the suspension of drilling activity ahead of cyclone season, which runs from November to April, will impact the project's schedule and estimated a six-month delay could raise costs by $100 million.

Analysts said if Santos loses the appeal, there is further risk to the project.

In the bigger picture, Santos said the case raised issues of sovereign risk amid a slew of environmental litigation against gas projects, as drilling had been stopped after a regulator approved the project.

Santos' partners in Barossa are South Korean energy company SK E&S and Japan's top power generator JERA, a joint venture between Tokyo Electric Power (9501.T) and Chubu Electric Power (9502.T).

Its partners in Darwin LNG are SK E&S, Japan's Inpex Corp (1605.T), Italy's Eni, JERA and Tokyo Gas (9531.T).

Reporting by Sonali Paul; editing by Louise Heavens and Jason Neely

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