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Esso approves A$400m gas investment

17th March 2022

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – The Australian subsidiary of energy major ExxonMobil, Esso Australia, has taken a final investment decision on the development of additional gas from the Gippsland Basin Kipper field.

The A$400-million investment is expected to deliver an additional 200 PJ of gas between 2023 and 2027, with around 30 PJ to come online in 2023, providing critical gas supplies to help Australia’s southern states.

ExxonMobil Australia chairperson Dylan Pugh said Esso continued to invest to deliver reliable and affordable Gippsland gas to Australian homes and businesses, supporting local jobs and the Australian economy. 

“Natural gas has an increasingly important role in meeting demand for cleaner fuel, lowering greenhouse-gas (GHG) emissions in the power sector and supporting higher penetration of renewables by maintaining reliability, resilience and stability of the grid,” said Pugh. 

“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.”

The Australian Petroleum Production & Exploration Association (Appea) has welcomed the additional supply from Esso, with CEO Andrew McConville saying more gas supply in Victoria was welcome given the state had the highest domestic use and was also home to a growing manufacturing base.

“This is a A$400-million vote of confidence in the future of natural gas that will develop more supply, more security and more jobs,” McConville said.

“These significant investments by Esso Australia, which could deliver an extra 200 PJ 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.

“Victoria, in particular, has the highest domestic use in the country as well as an expanding manufacturing base so today’s news will help feed that and shore up east coast supply. The cheapest gas is the gas closest to the customer.”

McConville said gas was a cleaner energy source to support the growth of renewables and projects like Esso Australia’s would play an important role in reducing emissions.

“Natural gas is replacing coal and wood-fired power across the Asia-Pacific region to help meet net-zero targets so this project will play its part reducing emissions,” he said, adding that more industry investment like Esso Australia’s relied on supportive investment settings to help make Australia more competitive in global capital markets.

“There is a massive opportunity for Australia to have more big investment decisions like this, but the policy settings have got to be right,” he said.

Edited by Creamer Media Reporter

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