Introduction
A flurry of petroleum development activity in the Gippsland and Otway basins over the past few years has lead to over $4.5 billion in investment in Victoria and about 4,500 construction jobs and over 280 permanent jobs.

This excludes the proposed Mortlake Power Station and Heywood Pulp Mill projects that have gas pipelines as part of their projects which together have resulted in some $1.4 billion in investment, about 1000 construction jobs and 75 permanent jobs.

With pipelines extending to the north, west and even across the Bass Strait to the south to access interstate markets, Victoria is clearly proving to maintain its status as an energy hub for southeast Australia.

The recently commissioned Casino gas project is a prime example of how Victoria likes to do business with this project moving into operation with the relevant approvals in record time.
Availability of geoscience data freely on the web, together with new discoveries, proves Victoria to be a State where investors may make informed decisions in relation to exploration risks.

Some of the key petroleum projects in Victoria are discussed below. These projects are a clear step towards promoting development in regional Victoria thereby enhancing these areas as vibrant places to live and work.

Projects completed in 2006

Casino Gas - Santos Ltd
In March 2006, the $200 million Casino gas project was launched marking the successful completion of the project at TRUenergy’s Iona gas plant in Port Campbell with the introduction of first gas into the pipeline. This project comprises the offshore recovery of gas using subsea wellheads and its transportation to shore in a dedicated pipeline (some 35 km offshore and 12 km onshore) to TRUenergy’s existing Iona gas plant for processing and distribution. The Casino gas field contains estimated recoverable reserves of 285 PJ of gas. Exploration drilling last year at the nearby Henry and Martha fields has identified additional reserves which could tie in with this project.

BassGas - Origin Energy Australia
The construction of the $750 million BassGas project is now complete following significant challenges. The project comprises an offshore platform at the Yolla gas field, a sub-sea pipeline to the Victorian coast near Kilcunda, an onshore pipeline to a gas plant near Lang Lang and a sales gas pipeline from the gas plant to join the GasNet system at Pakenham. The project is expected to supply up to 67 TJ of sales gas per day to the Victorian retail market. The Yolla field contains reserves of 324 PJ of sales gas, 14 million barrels of condensate, 972 thousand tonnes of LPG and 800 thousand barrels of oil.

Projects nearing completion

BMG Oil and Gas - Anzon Australia
This project was the first development to utilise a Floating, Production, Storage and Offtake (FPSO), the Crystal Ocean in south east Australia. The project boasts the outstanding achievement of reaching the milestone of loading the first tanker after being publicly listed only a year prior. The first tanker of oil left the Basker-Manta oil field in January 2006. The total budget for this project is estimated to be $330 million. The Basker-Manta oil reserve is estimated to be 39.2 million barrels. In addition, there are contingent (subject to receiving approval for the Basker-Manta-Gummy (BMG) gas project) new gas and gas liquids estimates, which are about 380 PJ and 19 million barrels, respectively. Anzon is aiming to have full oil field development at the end of 2006 and first commercial gas flow from the BMG gas project is expected in 2008.

Otway Gas - Woodside Energy Ltd
The $1.1 billion Otway Gas project involves the development of the Geographe and Thylacine gas fields, located 55 and 70 km respectively from Port Campbell. The project is currently in the final stages of construction with development based on a remotely operated platform, offshore and onshore pipelines and a gas processing plant located about 6 km north of Port Campbell. Thylacine and Geographe fields are expected to supply 950 bcf of raw gas (which is equivalent to 885 PJ of sales gas), 12.2 million barrels of condensate and 1.7 million tonnes of LPG. The fields are estimated to contain sufficient natural gas to provide more than 10% of current annual demand in south-eastern Australia over the next 10 years. Project completion is expected in early 2007.

Future projects

Golden Beach Gas - Cape Energy (Vic) Pty Ltd
Cape Energy proposes to develop the Golden Beach gas field located approximately 4 km off Ninety Mile Beach in the Gippsland Basin. The Golden Beach gas will only require minimal treatment for it to reach sales quality. Should this field be developed it will be the first in Victorian waters and will involve up to two gas wells, a pipeline approximately 20 km long and a small gas plant. Cape Energy has proposed developing the field by directionally drilling from onshore, a first for Victoria. The resource is estimated to be 35 PJ.

Henry Gas - Santos Ltd
Santos is proposing to develop the Henry gas field located 18 km offshore from the Victorian coastline (in Commonwealth waters approximately 65-70 m deep), southwest of Port Campbell. The proposal includes a single well drilled to about 1,785 m depth and a sub-sea tie-back into the existing Casino gas field sub-sea facilities. Subject to obtaining the required approvals, first-gas is expected in 2008.

Longtom Gas - Nexus
Nexus proposes to develop the Longtom field which lies about 30 km south off the Victorian coast near the town of Orbost. The best estimate of the contingent resource at Longtom is 438 billion cubic feet. This project will develop a gas field which is too small to be developed as a stand-alone greenfield project and maximises the use of existing infrastructure which minimises environmental effects in addition to increasing the security and competitiveness of gas supply and extending the life of the Patricia Baleen plant by about 10 years. First gas is
expected in 2008.

Kipper Gas - Esso Australia Resources Pty Ltd
The Kipper gas project has the potential to be one of the largest gas projects in Victoria in recent years, with a confirmed resource of approximately 620 bcf of recoverable gas plus condensate and LPG. The Kipper field is located in 100 m of water, some 45 km from the Ninety Mile Beach on the Gippsland coast. The production licence has been offered and first gas is planned for in 2009.

Other pipeline projects

Mortlake Power Station - Origin Energy
Origin Energy proposes to construct a $1.0 billion gas-fired power station near Mortlake in south-western Victoria. The 1000 MW power station will use gas from Woodside’s Otway Gas project, transported via a new 78 km gas pipeline that will be constructed as part of the power station project.

South Gippsland Gas Extension - Alinta
Alinta plans to build an underground natural gas pipeline on behalf of Multinet to supply five towns in the south Gippsland region with natural gas from the BassGas processing plant. This project will involve the laying of more than 250 km of gas pipes. This project is the first step towards connecting some 10,000 south Gippsland homes and businesses to natural gas.

Heywood Pulp Mill - Heywood Pulp Pty Ltd
Heywood Pulp Pty Ltd is proposing to build a $400 million pulp mill near Heywood in western Victoria. The proposal includes construction of a 31 km pipeline to draw gas from the SEAGas pipeline for the mill.

Conclusion

Victoria is keen to see industry consider this State as a place to do business and has worked hard to attract investments into Victoria by ensuring that potential investors have access to information through such programs as the highly successful Victorian Initiative for Minerals and Petroleum (VIMP) run by Geoscience Victoria. Project facilitation through the initial approvals processes is also available through the Minerals and Petroleum Business Development and Technology team of the Department of Primary Industries.

For further information, please contact:

Namiko Ranasinghe
Petroleum Development Adviser
E-mail: Namiko.Ranasinghe@dpi.vic.gov.au
Phone: 61 3 9658 4947

Disclaimer:
This article is based on publicly available information and may not be entirely accurate.