Santos has paused drilling in the offshore Barossa gas field while it waits on a federal court decision. 

The Munupi clan of the Tiwi Islands - near the gas field - have taken court action to  stop the company's drilling in the basin, claiming they had not been properly consulted before the multi-billion-dollar project was approved.

In court, Santos said it would pause drilling the Barossa gas fields until a Federal Court decision could be reached. 

The Environmental Defender's Office (EDO) had argued that federal approval granted in February was unlawful because Santos did not adequately consult all relevant stakeholders.

In fact, the EDO said Santos's consultation was limited to two emails and a phone message sent to the Tiwi Land Council, which went unanswered.

But Santos and the federal offshore gas regulator the National Offshore Petroleum Safety and Environmental Agency (NOPSEMA) argue that the gas company did fulfil its obligations.

NOPSEMA said it was not necessary for Santos to notify or consult with individual clan groups.

The Federal Court will resume on September 16 for a final decision or further arguments.