US giant ExxonMobil gives up control of critical Australian gas supplies
More than 600 workers at ExxonMobil subsidiary Esso Australia were told on Tuesday morning that their jobs and the operatorship of Victoria's Gippsland Basin joint venture – a network of offshore platforms in Bass Strait and processing plants at Longford and Long Island Point – would be transferred to Perth-based Woodside Energy from next year.
Under the deal, ExxonMobil and Woodside would remain 50:50 equity partners, with their responsibilities for decommissioning the ageing infrastructure unchanged, the companies said.
However, Woodside, as operator, would gain the ability to independently invest in future oil and gas wells or expansion projects in Bass Strait. On Tuesday, Woodside said it had identified four potential development wells that could deliver up to 200 petajoules of new gas into the tight east-coast domestic gas market – enough to supply about 40 per cent of a year's total demand.
The news comes as authorities, including the Australian Energy Market Operator (AEMO), sound warnings that millions of households in Victoria, NSW and South Australia are at risk of gas shortfalls during periods of elevated winter heating demand in as little as three years unless new supplies are made available. The vast Gippsland Basin gas fields, which have kept gas-reliant homes and businesses on the eastern seaboard well supplied for decades, have entered a period of rapid depletion, with scant new projects available to replace them.
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Producing and burning natural gas releases planet-heating carbon dioxide and methane emissions, which governments are trying to dramatically reduce in a push to combat dangerous global warming. Although more Australians are making the switch from gas-powered appliances to electric alternatives, demand is not falling at the speed needed to avert supply shortfalls in the coming years.
Australia's east coast gas market is on a path toward a 'structural shortfall,' global consultancy Wood Mackenzie warns.
'Gas demand on the east coast remains resilient, but new supply is not keeping pace,' it said.
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