Esso Australia Resources, a subsidiary of ExxonMobil, has announced plans to invest nearly $200 million in the Kipper 1B project to enhance gas production from the Gippsland Basin in Australia.
The project, approved by Esso Australia and its co-venturers Mitsui E&P Australia and Woodside Energy, aims to address potential gas shortages on the east coast and bolster domestic energy security.
The Kipper 1B project will involve drilling a subsea well into the Kipper field using the VALARIS 107 jack-up rig and upgrading the West Tuna platform.
Drilling operations are scheduled to commence later this year, with platform upgrades occurring simultaneously.
The project is expected to expand capacity from the Kipper field and deliver critical gas supplies ahead of winter 2026.
This investment comes in response to warnings from the Australian Competition & Consumer Commission about potential gas shortages on the east coast from 2027, which could necessitate imports.
The regulator has also highlighted challenges to expanding domestic supply, including lengthy regulatory approvals and policy uncertainty.
ExxonMobil Australia Chair Simon Younger emphasised the importance of the project, stating: “Esso Australia continues to invest in multiple projects that ensure our Gippsland operations sustain gas production well into the 2030s.
“Projects like Kipper 1B are vital to help meet the country’s energy security needs by bringing new supply online, which will be used exclusively for Australia’s domestic market.”
The Kipper 1B project follows the successful completion of the Kipper Compression Project and the West Barracouta project, which came online in 2021.
These initiatives are part of Esso Australia’s ongoing efforts to maintain and expand gas production in the Gippsland Basin.
Esso operates assets in Bass Strait as part of the Gippsland Basin joint venture with Woodside, and the Kipper Unit joint venture alongside Mitsui and Woodside.
The ownership structure of the Kipper field is divided between Mitsui (35 per cent stake) and Woodside and ExxonMobil (32.5 per cent each).
As Australia faces potential energy supply challenges, the Kipper 1B project represents a significant step towards ensuring the country’s energy security and maintaining a stable domestic gas supply for years to come.
