Operations at the Katnook gas plant near Penola will be suspended during the coming financial year.
Owner Beach Energy has told the stock exchange that gas volumes have declined below the minimum turndown rate.
Elsewhere in the Otway Basin, Beach Energy plans to conduct 3D seismic acquisition over the Dombey field during this period to assess further opportunities to re-commence operations at the Katnook plant in future years.
The redeveloped gas processing plant again provided natural gas to the region a year ago following a major redevelopment, assisted through a $6m grant from the Federal Government’s Gas Acceleration Program.
It provided raw natural gas from the nearby Haselgrove-3 well and transported it via pipelines to customers like the Kimberly-Clark Australia Millicent Mill and others in Mount Gambier and the surrounding region.
They can source gas via the SEAGAS line. Meanwhile, Beach Energy chief executive Matt Kay said the March quarter had delivered challenging results for the business. “We are facing a number of challenges across our Western Flank oil and gas assets as a result of the unique nature of these fields,” Mr Kay said.
“The past five years has seen the Western Flank outperform our expectations, but we are now witnessing underperformance from a number of fields. “This has had a negative impact on our production for the quarter, as well as our FY21 production guidance and Western Flank 2P oil and gas reserve.”
Beach Energy’s regional manager Jon Conti said the company “remains committed to delivering local gas for the South East, and to date, has produced over 2000 terajoules of gas via the plant since it was commissioned – the equivalent of half the region’s gas supply”.
“Importantly, this gas helped supply local industry, including Kimberly-Clark during the unprecedented activity during COVID-19,” he said. “Unfortunately, field decline from existing connected wells has meant that production from the plant will be suspended later in the year, while we explore nearby opportunities.
“In order to do this, we have plans to undertake the Dombey 3D seismic survey in the region during FY22. “This survey follows our consultation from last year, and will be undertaken while adhering to strict environmental and safety protocols.
“Significantly, our commitment to the South East includes supporting the local economy and local businesses through the supply chain. “We have invested more than $12m with over 45 local companies in the Limestone Coast region over the last few years of operations.”
Mr Conti said anyone seeking more information was welcome to visit the Beach Energy office on Church Street, Penola, or visit www.beachenergy.com.au