The agreement is for the sale and purchase of up to 983 petajoules (gross) of Bass Strait gas to AGL over a period of up to 14 years from 2004 to 2017. First gas sales are scheduled to commence on 1 January 2004.
"The deal is significant as it gives the joint venture a long-term relationship with AGL and an expanded role in supplying gas to New South Wales where we currently supply around 20 per cent of the gas market," said Philip Aiken, President and Chief Executive Officer for BHP Billiton Petroleum.
It also involves one of the largest sales of Gippsland gas since long-term supply arrangements were entered into with the Victorian Government in the late 1960s. Currently, the majority of gas entering the South Eastern Australia gas market is supplied under a long-term contract between BHP Billiton/Esso and the previously State Government owned Gascor. This contract is due to expire towards the end of the decade.
"The agreement is consistent with BHP Billiton's gas marketing strategy which is to increase our market diversification and secure new gas markets and volumes," Mr Aiken said.
In the 34 years since the BHP Billiton/Esso Bass Strait joint venture began production in October 1969, more than 3.5 billion barrels of oil and 5 trillion cubic feet of gas have been produced. Current production is around 120 thousand barrels per day of crude and condensate (gross), and 570 million cubic feet per day (gross) of gas.
BHP Billiton and Esso are also continuing with exploration and production activity in the Gippsland Basin. In October the joint venture announced that it is planning to commence what is expected to be the largest combined exploration and production drilling program in the Gippsland Basin since the 1980s.
BHP Billiton has a 50 percent interest in the Bass Strait oil and gas project with joint venturer Esso Australia Resources Pty Ltd (50 percent, operator).
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