Production at Australia’s BassGas Joint Venture has been reduced to a third of normal levels due to a shut in of its Yolla-4 well following an hydraulic equipment failure, operator Origin Energy Ltd said on Wednesday.

Origin said it expects BassGas, located off Australia’s southern coast, to return to normal production levels by the end of December 2008. A similar issue with the Yolla-3 well was resolved in January, the firm said in a statement.

The BassGas facility, which began production in 2006, produced 5.7 petajoules (PJ) of gas in the quarter ended September, which is equivalent to 22.8 PJ on an annualised basis, according to Origin’s quarterly report last month.

The project has a production capacity of 1 million barrels of condensate and 65,000 tonnes of liquid petroleum gas each year.

Gas from the facility supplies the retail market in Victoria state, while the condensate is sold to a Royal Dutch Shell refinery in the state.

Victoria consumes more than 220 PJ of gas each year and output from the BassGas facility accounts for only about a tenth of total supplies.

Origin has a 42.5 percent interest in the project. Australian Worldwide Energy Ltd(AWE) has a 42.5 percent stake, while CalEnergy Gas Ltd owns the rest.

Shares in Origin fell 1.8 percent to A$16.20 on Wednesday, while AWE rose 2.7 percent to A$2.26.

Source: http://www.afxnews.com

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