Esso Australia, a subsidiary of ExxonMobil Australia and operator of the Gippsland Basin joint venture, has made a final investment decision to progress additional gas development from the offshore Victoria Kipper field.
The gas operator is also advancing funding decisions to optimise production from the Turrum field.
About 30 petajoules will come online in 2023, and provide critical gas supplies to help avert winter supply risks forecast for Australia’s southern states in the Australian Energy Market Operator’s 2021 Gas Statement of Opportunities.
ExxonMobil Australia chair Dylan Pugh said Esso continues to invest to deliver reliable and affordable Gippsland gas to Australian homes and businesses, supporting local jobs and the Australian economy.
Pugh added: “Natural gas has an increasingly important role in meeting demand for cleaner fuel, lowering GHG emissions in the power sector and supporting higher penetration of renewables by maintaining reliability, resilience and stability of the grid.
“Our ongoing investment and commitment to supplying Australian customers means that the Gippsland Basin remains the largest single source of natural gas for Australia’s east coast.
“There is still plenty of gas remaining in Bass Strait and we are working hard to unlock its full value. More investment will be required for Victoria to maintain its reliable supply of natural gas, especially during winter.”
In early 2021, Esso Australia commissioned the West Barracouta project in the Gippsland Basin, one of the largest domestic gas projects this decade.
Industry body the Australian Petroleum Production and Exploration Association (APPEA) noted more gas supply and improved energy security for Australia would result from the $400 million of new investment.
APPEA chief executive Andrew McConville said more gas supply in Victoria was welcome given the state had the highest domestic use and was also home to a growing manufacturing base.
McConville continued: “This is a $400-million vote of confidence in the future of natural gas that will develop more supply, more security, and more jobs.
“These significant investments by Esso Australia, which could deliver an extra 200 petajoules of gas over the next five years and boost supply into Australia’s gas market on the east coast, can help meet future domestic demand.”
Federal Minister for Resources and Water Keith Pitt welcomed the major joint venture investment, noting the project would help fill the need for new projects to meet demand for gas during peak days during winter, as pointed out by the recent ACCC report.
Pitt added: “The development will deliver an estimated 200 petajoules of gas between 2023 and 2037 into the east coast market, contributing to our national energy security.
“Esso’s joint venture will provide the increased supply that will be welcomed by Victorian households and manufacturers dependent on gas.
“As energy security becomes a significant concern in many developed countries throughout Europe, it’s time for the Victorian government to support the gas sector and encourage new exploration and development for the benefits of all Victorians.”
