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4 July 2017

The gas market turning point

The demand for natural gas on Australia’s east coast has reached record highs just as the major Bass Strait fields it has relied on for decades approach the end of their productive lives.

“Last year was a record year for production from our Longford Plants,” said ExxonMobil Commercial Manager Stu Jeffries. “This year we are on track to set a new record.
“This certainly makes for exciting times for our business. We have just brought the new Kipper, Tuna, Turrum gas fields into production and we are actively working on developing more of our discovered undeveloped resources.”
Since Gippsland gas production began in 1969 it has been demand constrained, now we have come to the point where we are supply constrained.
“Back in the 1960s we discovered the three sisters – Barracouta, Marlin and Snapper – these large gas fields have been the workhorses of the east coast market,” explained Stu.
“We have been able to produce as much gas as the market wanted – first into Victoria and later spreading out to NSW, South Australia and Tasmania.
“Today the demand for our gas has never been higher. However, as we pursue our portfolio of discovered undeveloped resources, the challenge is finding means to bring these small fields online at a competitive price.
“In the early days we were the only source of supply for Victoria. Now the gas network extends across all of eastern Australia and we face strong competition from other gas suppliers.
According to the latest report from the Australian Energy Regulator, the Gippsland Basin now holds only five percent of Eastern Australia’s proven and probable (2P) gas reserves.
“If we are going to attract the hundreds of millions of dollars of investments necessary to develop each of our remaining fields, we will need to be confident that we can do it at a cost that can compete with the remaining reserves in Victoria, Queensland, NSW and South Australia, as well as potential pipeline or LNG imports,” said Stu.

Photo — The Marlin A Platform, built in 1969, and the new Marlin B platform built to develop the deep Turrum Field. “Back in the 1960s we discovered the three sisters – Barracouta, Marlin and Snapper – these large gas fields have been the workhorses of the east coast market.”
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