Chief Minister Adam Giles has further reduced his offer of gas to power Rio Tinto's alumina refinery at Gove in the Northern Territory.
Speaking at the South East Asia Australia Offshore Conference (SEAAOC) conference in Darwin, Mr Giles again justified reneging on the offer of 300 petajoules of government-contracted gas to Rio Tinto subsidiary Pacific Aluminium for 10 years because it would expose taxpayers to $3 billion worth of risk.
He also announced that the revised offer of 195 petajoules of gas over 15 years has now been cut to 175 petajoules.
He said he had received a commitment from the Federal Government to underwrite an $800 million loan to build a gas pipeline from Katherine to Gove, a distance of nearly 1,000 kilometres.
Mr Giles told the conference that Rio Tinto could source more gas for its Gove operations from companies including Santos.
"Santos, through their onshore gas development, powered the Territory for years and have offered up gas to Gove," he said.
Mr Giles said he was waiting for Rio Tinto to respond the reduced offer of gas.
Pacific Aluminium has several assets, including the Gove alumina refinery and Bauxite mine near Nhulunbuy in East Arnhem Land.
It was set up as a separate company by Rio Tinto in 2011, with the intention it would be sold.
That plan was abandoned when Rio Tinto said selling it for an acceptable price was not possible in the current economic climate.
The future of the town of Nhulunbuy hinges on the Gove operations.
About 1,500 people of its population of about 4,000 are employed in jobs linked to the refinery and mining.