The Australian gas giant was just hours away from beginning work on the Barossa pipeline off the coast of Darwin on Thursday when the Federal Court halted the works to consider whether the cultural risks have been evaluated.
Simon Munkara, a member of the Jikilaruwu Tiwi Island clan, argues Santos has not properly assessed submerged cultural heritage along the route of its Barossa export pipeline, which runs within 7km of Bathurst Island.
Justice Natalie Charlesworth granted the urgent injunction on Thursday morning saying Mr Munkara's interests were at risk of "irreparable damage".
Simon Munkara wants Santos to submit a revised environment plan for its Barossa project.
"There exists a serious question to be tried about the existence of risks for which no provision is presently made in the pipeline environment plan," Justice Charlesworth said during Thursday's hearing.
Santos is not permitted to lay any part of the pipe until a hearing on November 13 at which Justice Charlesworth will determine whether the gas company will need to reassess the environmental impacts of the pipeline.
CEO Kevin Gallagher said Santos would follow the directions of the court and would continue to defend its environmental assessments.
"While we appreciate there are a range of views, Santos has complied in full with the requirements of the (regulator)," the statement said.
The company said the guidance on the cost and schedule of the project remained "unchanged" for now.
"(We) will assess any impact on the schedule and cost of the Barossa Gas Project if the injunction is extended beyond 13 November and will update the market accordingly," the statement read.
Santos' share price plunged two per cent to $7.51 following Thursday's announcement.
CEO Kevin Gallagher said Santos would follow the directions of the Federal Court.
Energy analyst Bruce Robertson was sceptical of Santos' insistence its schedule for Barossa remained unchanged.
"When will Santos come clean with the market and admit the real costs of the delays?" Mr Robertson posted on X, formerly Twitter.
The ruling is just the latest in a number of legal challenges brought against the gas giant in recent years.
The Barossa project has been on hold since 2022 after the Federal Court found it failed to consult traditional owners over their cultural interests in the development area.
Santos had hoped to begin laying the pipeline in November this year to keep the project on track while waiting for the regulator to approve an updated environmental plan for the drilling activity.
Earlier this month, market analyst Gordon Ramsay said it was becoming difficult for Santos to complete the pipe-lay before the end of the year to meet its 2025 target.
"Unfortunately, delivering Barossa on time and budget is becoming more of a stretch target as we get close to year-end," he said.
Santos has recalled the pipe-laying ship back to Darwin.
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