An expansion for the Minerva Gas Plant is on the cards if an $80 million search for gas off the coast of Peterborough is successful.
The first offshore gas exploration for seven years in the Otway Basin will begin this weekend when the Ocean Monarch drilling rig arrives in the region this week.
The rig - which will be visible from the coast - will be used to drill two offshore wells in a bid to find a new source of gas supply to help address the looming shortage in south-east Australia.
The joint project between operator Cooper Energy and Mitsui E&P Australia, who has a 50 per cent interest in the project, is expected to take 35 days.
Cooper Energy managing director David Maxwell said the rig's first well site was nine kilometres off Peterborough and would be visible at night with drilling a 24-hour, seven-day-a-week operation.
He said staff would be transferred out to the rig on a weekly basis via helicopter from Warrnambool airport. The rig is capable of holding 150 people.
Mr Maxwell said the exploration of gas in the Otway Basin was a "good economic proposition" given the gas supply in south-eastern Australia was "tight".
He said they were hoping to find enough gas at the Annie-1 well to last five or six years, and nine to 10 years at Elanora-1.
"We don't know until we get there," he said. "This is pure exploration. There's $80 million of our money being put at risk here.
"If we have success here that will encourage us to go back and look for more.
"If we have a very good result we would need to expand the Minerva facility."
If the companies find gas, it will be extracted back to the onshore Minerva facility near Port Campbell via their existing pipelines on the seabed. "You won't see platforms or anything like that," Mr Maxwell said.
Cooper Energy is expected to take over BHP's Minerva gas plant, and its staff, when it stops extracting gas from the Minerva gas field early next year.
"It would be able to take gas from our existing gas fields Casino Henry and any discovery here from late next year," Mr Maxwell said.
"Our plan is to maintain the staff at the gas plant."
However, he said details of the changeover was something Cooper Energy and BHP still need to work out.
Gas from Cooper Energy's Casino Henry fields currently goes to Lochard Energy's Iona gas plant near Port Campbell, but would be transferred sometime next year.
It is not the only gas exploration project planned for the coast with Beach Energy set to start a four-year $1 billion onshore and offshore gas exploration later this year.
In September, their offshore rig is expected to begin up to nine offshore wells between 32km and 80km off Port Campbell as part of its Otway Offshore gas exploration and development project.
The new wells are expected to shore up production of gas for the domestic market at its Otway Gas Plant which it bought from Origin in 2018.
Later this year it will also begin drilling a new onshore well at its Nirranda South facility to tap into offshore natural gas reservoirs located about 5.5 kilometres from the coastline using "extended reach drilling".
Beach Energy is also expected to begin drilling exploration wells onshore at a new location between Port Campbell and Peterborough.
During the drill phase, a 55-metre-high rig will be visible from the Great Ocean Road at both sites.
The boom in gas exploration projects comes as the Australian Energy Market Operator warned of a potential gas shortage by the winter of 2024.
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