ExxonMobil subsidiary Esso Australia has commenced gas production from West Barracouta project in the Bass Strait offshore Victoria.

The project has been developed by the Gippsland Basin joint venture (JV), which is equally owned by Esso Australia and BHP Billiton Petroleum . It entailed an investment of A$400m ($309m).

Located in the VIC/L1 block in the Bass Strait, the West Barracouta gas field development involved drilling two gas production wells and construction of associated subsea gas production facilities to access gas in the existing Barracouta field.

ExxonMobil Australia chairman Nathan Fay said: “West Barracouta will likely be the largest domestic gas project for eastern Australia that comes along this decade, building on our long and proud history of reliably supplying gas used in Australian homes and businesses for more than 50 years.

“The Gippsland Basin remains today the largest single source of gas supply to the east coast domestic market. And West Barracouta demonstrates it still has the capacity to bring material new gas supply to the market, there is still plenty of potential left in the Bass Strait.”

The gas supplies from the West Barracouta project are expected to help address the gas shortfalls predicted in the southern and eastern states in Australia from 2023.

ExxonMobil estimates the reserves in the Gippsland Basin will meet one-third of south-east Australia’s domestic gas demand by the end of the current decade.

Nathan said: “The Gippsland Basin remains today the largest single source of gas supply to the east coast domestic market. And West Barracouta demonstrates it still has the capacity to bring material new gas supply to the market, there is still plenty of potential left in the Bass Strait.”

Production from the West Barracouta project will be supplied through a 5km-long pipeline via a new connection into the existing Barracouta pipeline. This allows gas flow directly to the Longford Gas Plants.