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Maritime Sector Could Help Revitalize Australia's Northern Territory

Inpex
Industrial sunrise, Inpex LNG plant, Darwin Harbor, Northern Territory, Australia (Geoff Whalan)

By The Strategist 2019-04-28 17:50:45

[By Paul Barnes]

It’s hard to argue against the importance of a modern coastal city in Australia’s Top End to geopolitics, the economy and the nation’s security. Darwin’s long history as a military post attests to that.

Populations thrive when people live in viable ambient environments, have access to prosperous local economies and can participate in community life. In recent years, Darwin’s economy has struggled in key areas. The challenges faced by the Northern Territory (NT) government are significant and fiscal belt-tightening is embodied in its budget recovery plan.

Darwin enjoyed an energy boom in the early 2000s as ConocoPhillips built the city’s first LNG processing plant. This continued when Inpex announced its $37 billion LNG plant and pipeline to address Japanese demand. But economic activity flattened with the plant’s completion in 2018.

Last year the NT gas taskforce was established to support and expand Darwin’s role as an LNG export hub, to grow the gas supply and service industry. Sources of support for significant infrastructure investment, such as the Northern Australia Infrastructure Facility, exist to provide loans to infrastructure projects across the nation’s north. These links should be encouraged.

An additional growth opportunity is in the digital economy. The NT could promote the development of a subsea internet link between Darwin and Singapore via East Timor, which is less than 700 kilometres away. This would add resilience to Australia’s global connectivity and support other investments in the digital economy for Darwin.

The logic for this, from a national resilience perspective, is that there are currently only two landfalls for subsea internet cables in Australia: Perth and Sydney. Historically, 95–99 percent of the country’s internet needs have been serviced by a limited number of undersea cables coming into these locations. While there’s more than one cable in Sydney and Perth, having connections at more than two locations makes sense not just in terms of redundancy.

A related area of possible development for Darwin, given the size of its harbor, is to host submarine cable maintenance services for the region. The South East Asia and Indian Ocean Cable Maintenance Agreement (SEAIOCMA) is a cooperative entity managed by 46 submarine cable owners to repair and sustain these cables.

As its name suggests, SEAIOCMA spans much of the Indian Ocean and all of Southeast Asia. It also covers large parts of East Asia and Australia. A dedicated repair ship is based at Subic Bay in the Philippines, and support services in Batangas provide repair, reinstatement and preventative maintenance of cable systems. The current cable maintenance agreement expires on 31 December 2022 and a more central maintenance node in Darwin could be an attractive option.

Defence and security will always make Darwin a priority from a national perspective but, as our northernmost capital city, different ideas to make the city more economically resilient need to be supported. It’s already a ‘smart’ place, but it needs encouragement and access to investment funds to be an ‘innovative’ place. The time to act is now.

Paul Barnes is head of the risk and resilience program at ASPI.

This article appears courtesy of ASPI's The Strategist blog, and it is reproduced here in an abbreviated form. The original may be found here.

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.