EXXONMOBIL and BHP Billiton will spend about $400 million to replace a 187 kilometre pipeline that transports crude oil and condensate between two of their sites in Victoria.

Connecting the Longford gas processing and crude stabilisation plant in Gippsland to the Long Island Point plant near Hastings, the pipeline is to be built adjacent to the existing pipeline between these locations.

ExxonMobil’s subsidiary company Esso Australia will operate the project, with the company aiming to start construction later this year pending regulatory approval.

In a statement, ExxonMobil said the original pipeline, which was built in 1969 and partially replaced in 1980, was nearing the end of its operational life.

“This replacement pipeline will not only allow the continued delivery of crude and condensate, but will also be required so that natural gas from Esso’s offshore Gippsland operations – which is produced along with these liquids – continues to flow to Australian households and businesses.”

ExxonMobil said the new pipeline would be about 350 millimetres in diameter, replacing the existing 700mm pipeline, though the existing pipeline would remain in place once the new pipeline was completed.

ExxonMobil Australia chairman Richard Owen said the replacement pipeline was another significant investment the company was making in the continuation of its Gippsland operations.

“Development of Gippsland’s oil and gas has historically brought the region significant longterm benefits, boosting economic growth and creating new jobs,” he said.

“Our commitment to the continued safe, reliable supply of cost-effective energy is demonstrated through this key infrastructure investment and our continuous pursuit of opportunities to reduce cost and improve productivity.”

At its peak the project is expected to generate about 500 jobs, as well as to deliver additional indirect employment opportunities.