By Exxon Mobil’s Australian subsidiary is set to invest close to $200 million into the Kipper 1B gas project.
This investment will be made in partnership with Mitsui and Woodside Energy, as announced by the US oil giant on its corporate website on Monday.
The Kipper 1B project is part of the larger Kipper gas field development located offshore Australia.
Expansion of gas production
This substantial investment highlights Exxon Mobil’s commitment to expanding its natural gas production in the region and strengthens its collaboration with key partners in the Australian energy sector.
The Australian Competition & Consumer Commission (ACCC) has issued a warning that the eastern coast of Australia could face a potential gas supply shortage as early as 2027.
This looming shortage could necessitate the importation of gas to meet the region’s energy demands.
The ACCC’s forecast highlights a concerning imbalance between projected gas supply and the anticipated demand in the coming years.
This has raised questions about energy security and potential price implications for consumers and businesses in the affected areas.
New project to help meet demand
Exxon’s local unit Esso Australia Resources said:
Projects such as Kipper 1B are vital to help meet the country’s energy security needs by bringing new supply online, which will be used exclusively for Australia’s domestic market.
The Kipper 1B project, situated in the Gippsland Basin off the south-east coast of Victoria, Australia, has received joint approval from major players in the energy sector: Esso Australia Resources, Woodside Energy (Bass Strait), and Mitsui E&P Australia.
This project is expected to tap into the rich hydrocarbon reserves in the region and contribute significantly to Australia’s energy production.
The collaboration between these companies highlights the strategic importance of the Kipper 1B project and the potential for future growth in the Gippsland Basin.
Mitsui, a prominent global trading and investment company, holds the largest share in the Kipper joint venture, with a 35% stake.
The remaining ownership is divided equally between two major energy companies, Woodside and Exxon Mobil, each holding a 32.5% stake.
This ownership structure establishes Mitsui as the primary stakeholder in the venture, while Woodside and Exxon Mobil maintain significant influence as equal partners.
Esso has further reaffirmed its commitment to the Gippsland region, assuring ongoing investment in its operations to maintain and optimise production levels for the foreseeable future.
Long term vision for Gippsland
The company’s strategic plan envisions continued production from the Gippsland assets well into the 2030s, indicating a long-term vision for the area.
This commitment not only highlights the significance of the Gippsland operations for Esso’s overall portfolio but also underscores the company’s confidence in the region’s potential for sustained hydrocarbon production.
Esso said:
The project is expected to expand capacity from the Kipper field, delivering crucial gas supplies to the market ahead of winter 2026.
The competition regulator’s recent report not only underscored the difficulties in establishing new domestic gas supplies but also specifically identified several contributing factors.
These included the protracted and complex regulatory approval processes that often delay projects, as well as the unpredictable and shifting policy environment, which creates uncertainty for investors and developers.
These combined challenges create a significant barrier to entry for new gas projects, potentially limiting domestic supply and impacting energy markets.
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