Eni said Blacktip, 110km offshore from northern Australia in the Bonaparte Basin, hosts recoverable reserves of 1.2tcf at a water depth of just 50m. Previous estimates have put the cost of developing the field around $A750 million.

Production is planned to begin in 2009 at an initial rate of 650 million cubic metres before increasing to 1.1 billion cubic metres. The onshore treatment plant will have a capacity of 1.3 bcm per year.

Eni previously signed a 25-year gas sales agreement with Power and Water Corporation (PWC) in the Northern Territory.

The company was also recently awarded five exploration licences in the Timor Sea and also holds a 12% stake in the Bayu-Undan field and 12% of the Darwin gas liquefaction plant.

Meanwhile, the Australian Pipeline Trust (APA) has signed a $A400 million gas transportation agreement with the Northern Territory Government and PWC to develop the Bonaparte Gas Pipeline.

The 277km pipeline will transport gas from Eni’s onshore gas plant at Wadeye to the Amadeus Basin to Darwin Pipeline (ABDP), 150km south of Darwin. The pipeline will initially be capable of delivering 30 petajoules per year with previous capital costs for the pipeline put at $130 million.

APA said it had started route selection, land access and preliminary engineering activities for the pipeline as it moves to meet the January 1, 2009 first gas deadline.