First contracts have been awarded for construction of a $120m bulk fuel storage facility at RAAF Base Tindal.

California joint venture Nova Nacap was awarded the US$80m contract to construct two jet fuel storage tanks at Tindal.

As well as the tanks, the works contract includes construction of an aircraft liquid fuel truck fill stand, fuel unloading stand, pump houses and filter building.

The tanks are being built in part to provide fuel for expected B-52 deployments by the United States into Australia.

Work is expected to get under way next year and be completed by February 2025.

More than 60,000 people quarantined at Howard Springs during the height of the pandemic. But the Defence Department is now considering using the facility to house thousands of military personnel during training exercises.

The Defence Department has now confirmed it is in negotiations with the Northern Territory government about leasing the facility.

"Potential future use options for the site have been canvassed during routine discussions between Defence and the Northern Territory Government," a defence spokesperson said.

Hospitality NT, which represents many of Darwin's hotels, said demand during the dry season is so strong that hotel rooms will be filled by tourists even if military personnel are housed at Howard Springs. "During the dry season, any large surge in military or government can absolutely impact other tourists," the organisation's CEO Alex Bruce said.

Secretary of Defense Lloyd Austin said Tuesday that the US will increase its military presence in Australia in a buildup aimed at China.

In a joint press conference with Australia’s defense minister and foreign minister, Austin said that the US will increase its rotational forces in Australia. “That includes rotations of bomber task forces, fighters, and future rotations of US Navy and US Army capabilities,” Austin said.

Many countries in the region are not eager to get on board with the US’s confrontational approach to China. The prime minister of Papua New Guinea said this week that his country can’t afford to get caught between the US and China and said he told the US your “enemy is not my enemy.”

Indonesia’s president expressed similar concerns during a meeting of the Association of Southeast Asian Nations (ASEAN) in November, saying the ASEAN must not let the region turn into a frontline for a new Cold War.

Details on the rotational deployments aren’t clear, but they will likely focus on the Australian city of Darwin in the Northern Territory, where US Marines have been rotating through for years.

The US will increase rotations of its air, land and sea forces to Australia and has condemned China’s “dangerous and coercive actions” across the Indo-Pacific region.

As part of the step-up in defence ties, the US plans to preposition munitions and fuel in Australia to support its military forces.

Airfields in northern Australia are set to be upgraded to enable rotations of US aircraft.

Defence secretary also pledges to help Australia acquire nuclear-powered submarines ‘as quickly as possible’ at annual high-level talks.

Austin said the US would “increase rotations of our air, land and sea forces” to Australia as the two countries were “determined to be a force for stability” in the region.

“That includes rotations of bomber task forces, fighters and future rotations of US navy and US army capabilities,” Austin said, adding that the specific details would be worked out by officials and announced at a later date.

The UK defence secretary, Ben Wallace, will join Marles and Austin for a first meeting of the Aukus defence ministers on Thursday.

The agreement was finalized during a joint U.S.-Australia meeting that included Austin and his defense minister counterpart from Canberra.

"Based upon today's talks, we will increase the rotational presence of U.S. forces in Australia," Austin said at a press conference at the State Department. "That includes rotations of bomber task forces, fighters and future rotations of U.S. Navy and U.S. Army capabilities."

The increased military presence in Australia comes after the U.S. and U.K. announced in September 2021 that they had agreed to school the Australians on the "extremely sensitive" technology of nuclear-powered submarines. The U.S. had previously shared the technology only with the British.