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ExxonMobil Sanctions Australian Natural Gas Project

A natural gas project offshore Australia, designed to boost domestic supply and potentially increase exports, has been sanctioned by ExxonMobil Corp.

Front-end engineering design (FEED) work has been completed and key contracts have been awarded for the West Barracouta gas field in Bass Strait offshore Victoria, part of the company’s continuing investment in the Gippsland Basin.

“We continue to use advanced technology, along with our extensive, decades-long understanding of the Gippsland Basin, to ensure full potential of the resource can be realized,” said ExxonMobil Production Co. President Neil W. Duffin. “Our objective is to produce West Barracouta gas for the Australian domestic gas market by 2021.”

ExxonMobil subsidiary Esso Australia Pty Ltd operates the Gippsland joint venture (JV) on behalf of a 50-50 partnership with BHP Billiton Petroleum (Bass Strait) Pty Ltd. The JV now supplies around 40% of east coast gas demand, ExxonMobil noted.

Australia last year pulled back from threats to curb gas exports after Origin Energy Ltd., Santos Ltd. and Royal Dutch Shell plc, the country’s three largest east coast exporters, guaranteed they would offer more supply for the domestic market to ease potential shortages.

ExxonMobil has completed FEED work for the project, which is part of the Esso-BHP Gippsland Basin JV. Contracts also have been awarded to Subsea 7 and OneSubsea, a Schlumberger Ltd. company. The project is to be tied back to the existing Barracouta infrastructure in Bass Strait, the first offshore field ever discovered in Australia.

The new project builds on more than US$4 billion invested by the JV in other recent projects in Victoria to boost supply for Australian gas demand, including the Kipper Tuna Turrum offshore project and the Longford Gas Conditioning Plant.

“The Gippsland Basin Joint Venture has 50 years of experience in Bass Strait,” ExxonMobil Australia Chairman Richard Owen said. “Since the first Bass Strait well was drilled in 1965, about 4 billion bbl of crude oil and 8 Tcf of natural gas have been produced.”

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