Santos has completed the sale of its 35% non-operated interest in the Kipper gas and condensate field in Australia to Mitsui E&P Australia (MEPAU) for A$520m ($380m).

The field is located in the Gippsland Basin, 45km off the coast of Victoria and lies in water depths of 100m.

Mitsui said in a statement: "This acquisition is a significant step for Mitsui to expand its gas business in the region, and represents its aim to contribute to the reliable supply of energy to the Australian East coast.

"This acquisition is a significant step for Mitsui to expand its gas business in the region."

"Diversification of energy upstream business in Australia, currently weighted towards LNG and crude oil, is also an important rationale of this investment."

The company added that the acquisition of domestic gas asset will lead to a robust energy asset portfolio against commodity price volatility.

The agreement was signed in November 2015, between Mitsui’s wholly owned subsidiary MEPAU and Santos Offshore.

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Production of gas, condensate and LPG from this offshore field is expected to start in 2016 with plans to supply the products to domestic market.

The field has recoverable reserves of 620 billion cubic feet of gas and 30 million barrels of condensate and LPG.

Initially, the Kipper field was first discovered in 1986, when a 213m gas column was intersected in fluvial sandstones of the Golden Beach Subgroup.

In July 2006, production licence VIC/L25 was granted to Esso Australia Resources, BHP Billiton Petroleum and Santos Offshore, with their decision to begin the initial stage of development following at the end of 2007.

Image: Location Map of the Kipper field. Photo: courtesy of Mitsui & Co Ltd.