Gas supply problems emerged in the area when it became apparent that watering problems were causing reserves to decline faster than had been anticipated, and the Katnook producers – a joint venture comprising Origin, an Origin subsidiary and an Australian Worldwide Exploration subsidiary – could no longer maintain gas supply at the required levels.

The Katnook fields supply a gas transmission network servicing over 6,000 industrial and residential customers in the Mount Gambier and Penola region, with annual demand of about three petajoules per year. This gas network is not physically connected to the major gas transmission system servicing south-east Australia.

Kimberly Clark’s agreement to reschedule maintenance and gas consumption has eased the pressure in this district, giving the joint venture some breathing space.

“OERL is closely monitoring the situation but is confident that with these arrangements gas supply will be sufficient until early March,” the company said in a statement.

“At that time it is expected Kimberley will seek to recommence certain activities and we are working together to determine what the system impact will be.”

Origin is fast-tracking the connection of these gas fields to the eastern Australian gas transmission network via the SEA Gas pipeline that transports gas from Port Campbell, Victoria to Adelaide. But this will not be completed until October.

"The Katnook producers have been taking a number of steps with the objective of increasing deliverability from the gas fields," Origin said in a statement.

"This has included the recompletion of an existing well, further testing of an appraisal well in the area which had not previously been considered economic to develop, and consideration of blending gas from the high CO2 Ladbroke Grove gas field into the sales gas. The period of time required to implement these measures is unable to be estimated at this time."

In the meantime, all customers in the Katnook region have been asked to continue looking at ways to conserve gas and reduce their gas consumption to assist in managing the current problem. So far no residential customers have been affected.

The Katnook Joint Venture comprises Origin Energy Resources Limited (operator) 20%, SAGASCO South East Inc 55.7143% (a wholly owned subsidiary of Origin Energy Limited) and Omega Oil Pty Ltd 24.2857% (a wholly owned subsidiary of Australian Worldwide Petroleum Limited).