Exxon Mobil Corporation’s XOM Australia-based subsidiary, Esso Australia Pty Ltd., reached a final investment decision to increase natural gas production from the Gippsland Basin Kipper field in southeastern Australia.
The move is part of ExxonMobil’s attempt to address the potential shortages in the supply of domestic natural gas. The Gippsland Basin Kipper field is operated by the Gippsland Basin Joint Venture (JV). Notably, Esso Australia operates the JV, with a 50% ownership interest.
The Gippsland Basin Kipper field is estimated to produce 30 petajoules (PJ) in 2023. ExxonMobil will invest $291 million to produce an additional 200 PJ of natural gas in the next five years. The company did not provide any details on the type of field development activities that will take place.
The Gippsland Basin has been a major supplier to Australia’s east coast domestic market. However, Australian regulators have cautioned that eastern Australia could see a natural gas shortage from 2026, as the maturing gas fields in the basin are drying up. This is driving the demand for liquefied natural gas (LNG) imports.
Additional production from the Gippsland Basin will be developed ahead of five proposed LNG import terminals, looking to serve the same market. One of the terminals has started preliminary construction activities.
ExxonMobil’s investment to increase Gippsland gas production will ensure reliable and affordable gas supply to Australia homes and businesses. The company is proceeding with funding decisions to commence production from the Turrum field offshore Victoria. There is an adequate amount of gas remaining there and ExxonMobil is working to unlock its full value.
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