Mitsui E&P Australia has signed an agreement to acquire Santos Offshore’s 35% working interest in the Kipper gas and condensate field, located in the Gippsland basin, around 45km off the coast of Victoria for $366m.
Production of gas, condensate and LPG from the field is expected to commence in 2016.
Mitsui plans to supply the products to the domestic market.
According to Mitsui, Australian East coast, where gas demand is expected to grow substantially due to start-up of three LNG projects in Queensland, requires new investments to develop gas resources to meet the demand.
The latest acquisition will allow Mitsui to expand its gas business in the region ,and further helps it to continue its efforts in improving the reserves, production, and competitiveness.
Mitsui believes that the purchase of domestic gas assets will lead to a better energy asset portfolio against commodity price volatility.
The deal needs to secure approval from the Australian Government and will complete after existing joint-venture partners waive their pre-emption rights.
The Kipper gas and condensate field is operated by Esso Australia Resources, which owns a 32.5% interest. The remaining partners are BHP Billiton Petroleum (Bass Strait) with 32.5%, and MEPAU, owning 35%.
Kipper, which lies in 100m of water, has a confirmed resource of 620 billion square feet of recoverable gas, together with reserves of recoverable condensate and LPG, amounting to some 30 million barrels of oil equivalent.
Image: Location Map of the Kipper field. Photo: courtesy of MITSUI & CO, LTD.