Cooper Energy plans $800m investment in Port Campbell gas plant

A recent move by the Victorian government to ban gas in new homes from next year is not expected to have a direct impact on the company's operations in the short term.

The proposed investment is a major turnaround for the plant that was was under a cloud until it was purchased from BHP by Cooper Energy about seven years ago.

New managing director Jane Norman said the company and its partner would split the cost of the possible three well development to bring new supply to the existing plant.

"We're committed to the area and to doing the right thing down there," she said.

There is about 25 terajoules of gas flowing through the Athena plant but it had the capacity to be 150 terajoules each day. "That growth is really important ," Ms Norman said.

With supply out of the Longford plant in Gippsland dropping off very fast, she said Cooper Energy was looking to get its project up in the Otways to offset some of the decline.

A number of operators have joined forces to bring a rig to the area in 2025-26 to do the drilling with the hope extra gas would start flowing through the plant from 2027 onwards.

"These are all sub-sea wells...so there's no platforms here or helicopters," Ms Norman said.

"This is a significant investment for us this project.

"We're anticipating that the current production will continue into later in this decade and hopefully until the new supply comes on and replaces it."

The plant will have to be "relifed" when it switches over to the new supply. "Typically you look to relife plants for another 15 to 20 years," Ms Norman said.

Gas started flowing through Cooper Energy's Athena around Christmas in 2021 - two years after the site had been "mothballed" - and it now employs more than 30 people onsite with support engineers and staff regularly visiting.

The company has also invested in the community with its medical program in conjunction with the Royal Flying Doctors service to provide telehealth services and transport to medical appointments in Melbourne.

Despite a gas ban in new homes, Ms Norman said there was a growing role for gas as the market transitioned to renewables.

She said gas was used three ways in Australia - for cooking and heating in residential homes, for industrial manufacturing and in power generation.

"We actually see a growing role for gas in providing firming power for the integration of renewables into the power mix," she said.

Ms Norman said that would only grow as more renewables were pushed into the grid because they, by their very nature, were intermittent and they needed something reliable that could flex around them.

"The energy transition is complicated. It needs to be a transition. It's not going to be something that just happens overnight," she said.

"The reality is on a unit of energy basis, gas is about half the cost of electricity in Victoria. You'd really want to see the cost of electricity come down for people to actually make a saving if they were moving away from using gas for heating, cooking and hot water in their homes."

Ms Norman said gas was important for farming and food security - being used as feedstock, processing and packaging.

She said gas was also used as a feed stock to make fertilisers used by farmers. "The dairy industry itself uses gas as a processing heat to make powdered milk products...it's a very important product," she said.

Some of Cooper Energy's gas production was also sold directly to large manufacturers such as Visy to make paper and glass.

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