Situated in southeast Australia offshore Victoria, the Kipper gas field is located in 328 feet (100 meters) of water 28 miles (45 kilometers) from the Gippsland coastline. Discovered in 1986, Kipper is located in the hydrocarbon-rich Bass Strait. Recoverable reserves on the field reach 620 billion cubic feet (18 billion cubic meters) of gas and 30 million barrels of condensate.

The field is held by the Kipper Unit Joint Venture, which is operated by ExxonMobil subsidiary Esso Australia with 32.5% interest in the project. Partners include Santos with 35% and BHP Billiton with 32.5%.

Field Development

After extensive seismic work in 1999, the Kipper gas discovery was confirmed by an appraisal well in 2002. In 2005, partners in the field signed an MOU agreeing to develop the field using existing subsea pipeline infrastructure, offshore production platform and onshore Gippsland processing facilities, which are held by a 50/50 joint venture between BHP and Esso called Gippsland Basin Joint Venture (GBJV). Front End Engineering and Design (FEED) commenced on the project at the close of 2006.

Field development plans for Kipper include a number of subsea wells tied to a subsea manifold, and then tied-back to the existing West Tuna platform. After processing, gas will be transferred through an existing pipeline to the Longford gas processing plant.

Kipper will be developed in a number of stages. First, the field will be developed through two subsea gas wells, three new pipelines and four subsea coolers. Additionally, modifications will be made to the West Tuna platform to accommodate the new production. This is the first third-party gas to use the GBJV facility for processing. Approved in December 2007, costs for the first phase of development are estimated at US $1.1 billion.

J. Ray McDermott was awarded the engineering, procurement, construction and installation contract for the Kipper project in April 2008. Construction for the first phase of development is expected to commence in the second half of 2008.

The next stage of development includes another two gas wells being brought on stream. Further field development plans call for new gas compression services to be installed at the GBJV facilities as well as an onshore CO2 treatment plant.

Existing Infrastructure in Bass Strait

Discovered in 1965, the Barracouta gas field was the first well drilled offshore Australia. Since then, myriad fields have been discovered in the area. The Bass Strait currently boasts dozens of offshore platforms and installations, as well as a network of 373 miles (600 kilometers) of subsea pipelines. Bass Strait reservoirs are currently expected to produce through 2030 and beyond.

A US $403 million (A $600 million) development in 1993, the West Tuna oil and gas production platform was built in Australia's Port Kembla. The facility consists of a concrete-cast base, as well as topsides with oil and gas processing facilities, a crane with 1,653-ton (1,500-tonne) lifting capabilities and living quarters that can accommodate a crew of 84 people.

Production

Initial production on Kipper is expected to commence in the first half of 2011. The second stage of development is scheduled to be completed in 2014, and the last phase of development is planned for 2016.