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.

American submarines will visit Australia more regularly but Defence Minister Richard Marles has rejected basing them down under to bolster our defences until our nuclear-powered boats hit the water.

Mr Marles is planning to use this week’s first meeting of AUKUS defence ministers to lock in the key planks of Australia’s nuclear submarine plan before it is unveiled early next year.

But he said home-porting US submarines in Australia was “not the answer” to covering any capability gap that emerged before our boats were in service.

This week’s AUSMIN meeting between Australian and US defence and foreign affairs ministers is also likely to lock in an expanded US Marine rotation in Darwin, and potentially the deployment of more US aircraft including nuclear-capable B-52 bombers.

The Yanks have bade farewell to the Northern Territory with the end of the 2022 Marine Rotational Force – Darwin.

The Territory hosted 2200 US military personnel in the MRF-D’s 11th rotation, which began in March, for the relationship strengthening exercise.

There were a multitude of activities undertaken this year, including Exercise Koolendong, a bilateral warfighting exercise held in the NT and Western Australia.

MRF-D Commanding Officer and regimental commander for the historic 5th Marine Regiment Colonel Chris Steele said the US and Australia were “committed to ensuring a secure, stable, and inclusive Indo-Pacific”.

MRF-D 2023 is expected to begin next March.