Eni, government sent for peace talks

The Northern Territory government’s lawsuit against energy giant Eni has been put on ice, with the pair sent for private peace talks to resolve their ongoing gas supply stoush. 

The government’s utility Power and Water Corporation sued the multinational’s Perth-based subsidiary in September over allegations it breached their $5 billion gas deal.

PWC claims Eni has been struggling to meet its obligations under the 2006 deal for the past 18 months amid ongoing issues at the Blacktip gas field off the West Australian coast.

The nature of those issues were laid bare in the Supreme Court last week, with revelations the supplier had been delivering less than half the daily maximum of 108 terajoules and had twice declared an event of force majeure.

PWC has been trying to get its hands on the principal supplier’s records to gather more details, with the government’s Gas Task Force chair Alister Trier telling the court he feared supply would cease completely and that it had been hamstrung by its inability to assess the risk.

But Eni accused PWC of “dramatising” its supply woes, insisting the company had been fully transparent about the situation and that it had no bearing on PWC’s ability to pursue contingency plans.

Further, Eni revealed it would be back to meeting its obligations in a matter of months, with plans already underway to bring another well into operation by early next year.

Eni sought an application to stay the proceedings, which it argued should be resolved through arbitration rather than in open court.

That application was granted by Justice Jeremy Allanson this morning, with the parties referred to arbitration.

Eni’s lawyer Mark van Brakel told the court the energy company had every intention to pursue indemnity costs in light of the judgment.

A final decision on who should foot the bill for the legal costs is set to be handed down next week.

The court hearing comes just weeks after Eni lodged an environmental plan with the national regulator to drill up to two new wells in the Blacktip field.

Initially, PWC had sought a court declaration that Eni breached the deal and orders that would force ENI to provide evidence to explain the issues.

It also wanted Eni to cover the costs of the lawsuit.