Deliveries began last Friday to the companies’ customers in the South West of Western Australia.

Bringing Xyris on stream would help avoid repetitions of recent power supply problems, according to Arc managing director Eric Streitberg.

Last summer had seen enforced restrictions on power consumption on one of the hottest days of the year, and just last month the failure of a compressor on the Dampier-to-Bunbury pipeline had forced power utility Western Power to use oil and coal-fired generators to avoid blackouts and required Arc to reduce supply to some of its customers.

“Production from Xyris and other new fields will ensure that there are unlikely to be further supply restrictions from the Perth Basin,” Streitberg said.

“On the financial side, the increased gas production will mean that Arc will no longer be purchasing back-up gas from the Dampier-to-Bunbury pipeline and this will add significantly to the bottom line for the year.”

The Xyris development is the first green-field gas development in the Perth Basin since Beharra Springs, about 14 years ago.

The Xyris gas accumulation was discovered by the Xyris-1 exploration well drilled by the L1/L2 joint venture in April. The joint venture – which comprises operator Arc Energy and Origin Energy, both with 50 per cent stakes – subsequently approved the development of the field in August.

Next activity at the site will be the connection of the Xyris South-1 well. A recent clean-up flow from this well flowed gas at rates of up to 8 million cubic feet per day on a 28/64 inch choke and a well-head flowing pressure in excess of 1500 psi.

Shares in ARC Energy yesterday rose 3 cents to $1.27 and Origin 9 cents to $6.88.