Major Australian company Woodside Energy has completed the transfer of operational functions for assets in the Gippsland Basin, which were previously managed by a subsidiary of the American company ExxonMobil.

Importance of Gippsland Basin Assets

The Gippsland Basin assets are considered vital energy facilities, supplying gas to both residential and industrial consumers across Australia. In July of last year, an agreement was signed to transfer operational responsibilities for these assets, including offshore production facilities in the Bass Strait, the Longford gas plant, the Long Island Point gas condensate processing facility, and the associated pipeline infrastructure.

Contribution to the Gas Market

All gas produced by Woodside in the Gippsland Basin is supplied to the domestic market. Production in this region meets about 40% of the gas demand on Australia’s east coast. The region employs around 1,200 people.

Joint Venture Structure

Woodside now serves as the operator of the Gippsland Basin Joint Venture (GBJV) and the Kipper Unit Joint Venture (KUJV). Ownership in GBJV is split equally between Woodside and Esso Australia (50% each), while in KUJV, Woodside and Esso Australia each hold 32.5%, and the remaining 35% belongs to Mitsui E&P Australia.

Development Prospects

Future development opportunities for GBJV include four identified wells that could potentially deliver up to 200 petajoules of additional gas (approximately 5.341 billion cubic meters) to the east coast market.

Impact of the New Gas Reservation Scheme

In May, a national gas reservation scheme was officially introduced, requiring exporters to supply 20% of their export volumes to the Australian market. This scheme will take effect from July 2027. The details of how this policy will be implemented are still being determined, creating uncertainty for operators of current and planned gas projects. A public consultation organized by the Department of Climate Change, Energy, the Environment and Water of Australia concluded on Tuesday.

Additional Woodside Deals

Woodside is also involved in an asset swap deal, under which the company will acquire a 16.67% non-operating stake in Chevron’s North West Shelf (NWS) project and oil project, as well as a 20% non-operating interest in the Angel carbon capture and storage (CCS) project. In exchange, Chevron will receive a 13% non-operating stake in Woodside’s Wheatstone project and a 65% operating interest in the Julimar-Brunello project. The completion of the swap is expected in the second half of the year, pending necessary regulatory approvals and the completion of the Julimar Phase 3 project.