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ExxonMobil has raised eyebrows by abruptly withdrawing from a carbon storage project in Australia’s depleted Gippsland Basin. The global energy giant pulled its environmental permit application for the South East Australia Carbon Capture Hub (SEA CCS), a joint venture with Australian company Woodside Energy.
This decision comes just days after ExxonMobil and Woodside Energy announced a final investment decision to develop a new natural gas exploration project in the same basin.
According to recent updates from the energy sector, Australian regulators have warned of potential supply shortages on the east coast, which could force the world’s second-largest liquefied natural gas exporter to import gas.
Carbon Storage in Gas Fields
The SEA CCS project aimed to store captured carbon dioxide in the depleted Bream offshore oil and gas field, located off the coast of Victoria. The plan involved building a pipeline from the Longford gas plant to the coast.
Evaluation of the field’s infrastructure for carbon storage was scheduled to begin in the second half of this year. The partners had submitted environmental permit applications to the federal government in 2023, and front-end engineering and design work had been completed.
The site was expected to store up to 2 million tons of carbon dioxide annually, with operations commencing in 2025 and continuing for 7 to 10 years.
Explaining the project’s cancellation, a spokesperson for ExxonMobil’s Australian subsidiary, Esso, stated that the Bream A platform (where carbon storage was planned) was “no longer required for any carbon capture and storage activities.” The company will proceed with decommissioning the platform as per regulatory requirements.
In 2021, regulators had instructed ExxonMobil to plug 180 wells and begin decommissioning 10 platforms, including Bream A, by September 2027.
ExxonMobil’s Gas Exploration in Australia
ExxonMobil and Woodside Energy have announced a final investment decision for the Turrum Field Stage 3 expansion project in the Gippsland Basin. The project, with an investment of US$221.3 million, aims to extract gas from undeveloped fields.
This follows Esso Australia’s recent decision to invest AUD 200 million (US$127 million) in the Kipper 1B gas project, in partnership with Mitsui E&P Australia (MEPAU) and Woodside Energy.
The Kipper gas field, also located in the Gippsland Basin, holds recoverable reserves of 620 billion cubic feet of gas, along with 30 million barrels of condensate and liquefied petroleum gas.
Woodside Energy’s Executive Vice President and Chief Operations Officer, Liz Westcott, said that the Turrum Field Stage 3 and Kipper 1B projects will unlock additional gas resources to prevent future supply shortages.
She added that all gas produced from the Bass Strait is sold in the Australian market, benefiting industries, power generation companies, and households.
ExxonMobil Australia Chairman Simon Younger stated that while the Gippsland Basin is depleting, these projects will ensure continued gas production in Australia beyond 2030.
The Australian Competition and Consumer Commission warned in January 2025 that the east coast of Australia could face gas supply shortages starting in 2027, potentially requiring imports.
