A court has dismissed an application by traditional owners in Australia for an injunction to prevent South Korean public finance institutions from supporting a proposed gas export project.

Representatives of the Tiwi Islander and Larrakia indigenous peoples in northern Australia launched legal proceedings in March to stop the South Korea Export-Import Bank (Kexim) and export credit insurer K-Sure from extending A$964mn (US$725mn) in financing and insurance to the Barossa gas project.

But this week Seoul’s Central District Court threw out the application, according to Reuters.

Among the reasons the court gave in declining to grant an injunction were that there are pending permit approvals and that there may be opportunities for the plaintiffs to challenge the project in the Australian courts, according to Dongjae Oh, a climate finance researcher Solutions for our Climate, an NGO.

South Korean energy firm SK E&S has a 37.5% stake in the Barossa project, which is being developed by Adelaide-based oil and gas producer Santos. Neither Kexim or K-Sure have announced details of their proposed support for the project.

“Now that the court has ruled against the case, the South Korean export credit agencies may be gearing up to rubber-stamp the addition of hundreds of millions of dollars,” says Oh. “If this goes forth, we fear that the South Korean government’s funding may lend credibility to Santos and SK E&S to get the remaining pending approvals.”

“We hope the new pro-climate Australian administration will make decisions that centre around the climate crisis and the First Nations people’s voices,” Oh added, referring to Australia’s new centre-left government, elected last week.

A spokesperson for Kexim told Reuters after the court’s ruling that the institution plans “to review various factors such as [the] necessity of LNG imports as well as environmental factors to support the project”. A spokesperson for Santos declined to comment.

Jihyeon Ha, a legal expert at Solutions for Our Climate, says in a written statement that “the South Korean court has historically been very timid about environmental cases and cross-border issues”.

A similar legal challenge mounted by three Indonesian citizens to prevent Kexim, K-Sure and the Korea Development Bank from financing the construction of coal-fired power plants in 2019 was similarly rejected by the courts in South Korea.

The Barossa project involves a 300km-long pipeline from the gas field to an export terminal near the city of Darwin. The traditional owners who filed the legal case said in March that they had not been properly consulted by Santos or the initial developers, ConocoPhillips, and had not given consent for the pipeline.

The pipeline will pass near the Tiwi Islands, home to important sea life, fishing areas and cultural sites.

South Korea is overwhelmingly reliant on fossil fuel imports for its energy needs. Its public finance institutions, along with those of Japan, China and Canada, are major backers of overseas oil, gas and coal projects, according to the Public Finance for Energy Database.

Between 2018 and 2020, South Korean public finance institutions provided just over US$10bn in support for fossil fuel projects, according to the database.

SK E&S plans to export 1.3 million metric tons of LNG from Barossa each year and says it will use carbon capture and storage to remove the plant’s direct carbon dioxide emissions from the atmosphere.

The Japan Bank for International Cooperation has also committed to lending US$346mn to finance the acquisition of a 12.5% stake in the Barossa development by Japanese energy giant Jera, despite calls from Australian and Japanese campaigners for the state lender to shirk the project.