Border air patrols scouting for asylum-seeker boats could be disrupted by rising ocean waters swamping a fuel depot on Cocos Islands.
The combination of beach erosion and a king tide resulted in sea water lapping at the depot in December.
The islands' administrator Jon Stanhope described the event as a "major sea surge" that had caused "incredible" damage.
"This is an ongoing issue and an increasingly serious one," he told AAP.
The erosion could have major ramifications for the federal government's Operation Sovereign Borders.
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A P-3C Orion maritime patrol aircraft is permanently based on Cocos Islands for aerial surveillance operations.
There are fears that further erosion could result in the depot's six fuel tanks, which have the capacity to hold 10 million litres of aviation fuel and diesel, becoming submerged as early as mid-year.
Mr Stanhope says building a wall to protect the depot, supplied by Shell Australia, is a significant and urgent task.
Less than 10 metres separates the depot and the sea.
If the depot cannot operate, Defence may be forced to use an alternative refuelling base in north-west Western Australia or even in Indonesia.
Limited fuel storage capacity on Christmas Island rules it out as a base for patrol aircraft.
Defence is understood to be aware of the race against time and late last year held an emergency meeting on the issue.
The previous Labor government committed $1 million towards building a sea wall, using giant sandbags, after then territories minister Simon Crean visited the island in 2012.
Mr Stanhope confirmed sandbags had been delivered to the island and were in the process of being filled.
"They can only be secured in periods of low tide," he said, adding the work should begin in the next few weeks.
Delays also have been caused by supply ships only arriving every six weeks.
"We are amazingly isolated, it takes forever to get anything here," Mr Stanhope said.
Cocos Shire chief executive Peter Clarke said five unemployed Cocos-Malay people had been given jobs filling the sand bags which weigh 1.7 tonnes when full.
Work is expected to be completed by the end of March.
"However, this is subject to weather and sea conditions," Mr Clarke said, noting it was still the cyclone season.
A Shell spokeswoman told AAP the company was working closely with government agencies to ensure fuel supplies on Cocos Island remain secure in the long term.
Comment has been sought from Defence.
