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BHP Billiton Approves Kipper Gas Field Development Offshore Victoria

Number 40/07

BHP Billiton today announced that participants in the Kipper Gas Field Development have approved the first phase of development of the Gippsland Basin field located offshore Victoria to produce new supplies of natural gas and liquids through new and existing Bass Strait facilities.

The first phase of the project includes two new subsea wells, three new pipelines and platform modifications. Gas and liquids will be processed via Esso and BHP Billiton’s Gippsland Joint Venture facilities. The Kipper field is located approximately 45 kilometres from shore in about 100 metres of water, and has a confirmed resource of approximately 620 billion cubic feet of recoverable gas and 30 million barrels of condensate/LPG. Estimated field life is 15 years.

First production is expected in calendar year 2011.

Costs for this phase of the development of the Kipper gas field and related Gippsland Basin infrastructure are approximately US$1.1 billion, of which BHP Billiton’s share is 45 per cent (approximately US$500 million).

BHP Billiton Chief Executive Petroleum, J. Michael Yeager, said the Kipper development is a welcome expansion to BHP Billiton’s producing assets in Bass Strait.

“After over 30 years of production, our Gippsland Basin holdings continue to provide significant development opportunities and Kipper is the latest addition. Also, Kipper will be an important part of our Eastern Australia gas supply portfolio and will allow us to meet expected South Eastern Australia gas demand.”

The Kipper Unit Joint Venture (KUJV) production will be the first gas to use the Esso-BHP Billiton Gippsland Basin joint venture facility that has third-party ownership.

The KUJV participants are: Esso Australia (32.5% and operator); BHP Billiton (32.5%); and Santos (35%). The Gippsland Joint Venture participants are: Esso Australia (50% and operator); BHP Billiton (50%).

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