Woodside Energy Group Ltd. will assume operatorship of the Gippsland Basin Joint Venture (GBJV) and Kipper Unit Joint Venture (KUJV), which account for 40 percent of natural gas supply in the Australian east coast market, from Exxon Mobil Corp., the Australian company said Tuesday.
“Woodside and ExxonMobil’s equity interests in the assets and current decommissioning plans and provisions remain unchanged”, Woodside said in a statement online.
ExxonMobil and Woodside equally own the GBJV. In the KUJV, ExxonMobil and Woodside each hold 32.5 percent while Japan’s Mitsui & Co. Ltd. owns 35 percent.
The operatorship change covers the Bass Strait production assets, the Longford Gas Plant, the Long Island Point gas liquids processing facility and associated pipeline infrastructure.
The GBJV and KUJV assets have a daily production capacity of 700 terajoules of gas, nearly 1,800 metric tons of liquefied petroleum gas, over 200 metric tons of ethane and about 2,200 metric tons of condensate, according to information on Woodside’s website.
The parties anticipate completing the transaction next year, subject to regulatory approvals and other conditions.
“As operator, Woodside will take on the responsibility for asset planning and execution activities, pursuing a value maximization strategy that targets further production and reliability improvements”, the statement said.
In March 2022 Woodside announced further investment to deliver additional gas between 2023 and 2027. Several facilities have ceased production due to field depletion, according to Woodside.
“This strategic move combines Woodside’s existing global operating capabilities with ExxonMobil’s highly experienced Bass Strait workforce who will transfer to Woodside, further strengthening Woodside’s overall operating expertise”, Woodside added.
“Operatorship of a larger group of assets in Australia will create economies of scale which are expected to realize over $60 million in synergies for Woodside from the Bass Strait after deduction of transition and integration costs.
“The agreement also creates flexibility to realize future development opportunities that meet Woodside’s capital allocation framework. Woodside has identified four potential development wells that could deliver up to 200 petajoules of sales gas to the market.
“Under the agreement, Woodside can solely develop these opportunities through the Bass Strait infrastructure subject to further technical maturation and a final investment decision”.
Liz Westcott, Woodside executive vice president and chief operating officer for Australia, said, “As a proudly Australian company, Woodside supports essential domestic energy needs in both Western Australia through the North West Shelf, Pluto and Macedon operations, and on the east coast through its equity participation in Bass Strait”.
“Taking operatorship of Bass Strait demonstrates Woodside’s continued commitment to meeting Australia’s domestic energy demand while maximizing the value of existing infrastructure”, Westcott added.
To contact the author, email jov.onsat@rigzone.com
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