PERTH (miningweekly.com) – Mining major BHP and its joint venture partner Exxonmobil have pulled the trigger on the West Barracouta gas project, in the Bass Strait, offshore Victoria.
BHP said on Thursday that its share of investment would amount to some $200-million, which was in line with the company’s commitment to meet Eastern Australian gas demand.
The project will see the development of one of the largest remaining sweet gas reservoirs in Bass Strait, through a two well brownfield tieback into existing Gippsland Basin joint venture (JV) infrastructure.
“The West Barracouta project is an important investment, underpinned by strong economics and rates of return, that will unlock a high quality, new gas resource and help offset Bass Strait production decline at a vital time for the east coast market,” said BHP’s GM for Petroleum Australia, Graham Salmond.
“The Gippsland Basin JV has played a central role in reliably meeting the needs of the Eastern Australia domestic gas market for 50 years.”
“We are also assessing other potential development opportunities in the Bass Strait to bring new supply to the domestic market.”
The West Barracouta development is expected to achieve first gas from 2021 and demonstrates the Gippsland Basin JV’s commitment to maintain Bass Strait as a substantial contributor in meeting future domestic gas demand.
“BHP is actively engaging with a diverse range of customers for future Bass Strait gas supply,” said Salmond.
BHP and ExxonMobil subsidiary Esso Australia Resources each have a 50% interest in the Gippsland Basin JV, which supplies around 40% of east coast Australian domestic gas demand.
The new project builds on more than A$5.5-billion invested by the Gippsland Basin JV in other recent projects in Victoria to supply Australian domestic gas demand, including the Kipper Tuna Turrum offshore project and the Longford gas conditioning plant, said ExxonMobil Australia chairperson Richard Owen.
“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 realised,” he added.