Woodside has agreed to assume operatorship of the Australian Bass Strait assets that it shares with ExxonMobil and plans to develop additional gas resources using existing infrastructure there.
Woodside will assume operatorship of the offshore Bass Strait production assets, the Longford Gas Plant, the Long Island Point gas liquids processing facility and associated pipeline infrastructure.
The Bass Strait assets include the Gippsland Basin Joint Venture (GBJV) and the Kipper Unit Joint Venture (KUJV). Each of Woodside and ExxonMobil Australia hold a 50% participating interest in the GBJV and 32.5% participating interest in the KUJV.
Woodside and ExxonMobil’s equity interests in the assets and current decommissioning plans and provisions remain unchanged.
The move combines Woodside’s existing global operating capabilities with ExxonMobil’s highly experienced Bass Strait workforce who will transfer to Woodside.
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. This potential production has been identified from within the existing contingent resource opportunity set.
Natural gas production from the Bass Strait assets is 100% dedicated to the Australian domestic market and currently supplies approximately 40% of Australian east coast domestic gas demand. The Bass Strait is the largest source of gas for the eastern Australian domestic market, which spans Queensland, New South Wales, Victoria, Tasmania, Australian Capital Territory, Northern Territory and South Australia.
Woodside EVP and COO Australia Liz Westcott said the rationale for the agreement is compelling and the transfer of operatorship reinforces Woodside’s position as Australia’s leading energy company.
“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,” she said.
Completion is targeted in 2026 and is subject to conditions precedent including obtaining regulatory approvals.