MITSUI E&P Australia has finalised its acquisition of a 35 per cent non-operated interest in the Kipper gas field, located in the Gippsland basin offshore Victoria, for $520 million.

The deal, first announced in November 2015, was finally completed in March, the companies announced.

Both operator Esso Australia Resources and BHP Billiton Petroleum hold 32.5% stakes in the field, which is located about 45 kilometres off the coast of Victoria.

Production of gas, condensate and LPG is expected to start in 2016, and the products are planned to be supplied to domestic market.

Mitsui said the acquisition was a significant step for it to expand its gas business in the region, representing its aim to contribute to the reliable supply of energy to the Australian east coast.

“Diversification of energy upstream business in Australia, currently weighted towards LNG and crude oil, is also an important rationale of this investment,” the company said.

“Mitsui believes the acquisition of a domestic gas asset, which is less vulnerable to global oil price, will lead to a more robust energy asset portfolio against commodity price volatility.”

“This acquisition is a significant step for Mitsui to expand its gas business in the region, and represents its aim to contribute to the reliable supply of energy to the Australian East coast as well as its continuous efforts in improving our reserves, production, and competitiveness,” Mitsui said.

The company bought the stake from Santos, which announced the sale in January.