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Woodside will take operating control of Australia’s first major offshore oil and gas development in the Bass Strait from ExxonMobil, in a 50-year first.

After striking a deal with its 50:50 joint venture partner, Perth-headquartered Woodside expects to assume control of the Bass Strait production assets, the Longford gas plant, the Long Island Point gas liquids processing facility and associated pipeline infrastructure.

No equity interest in the assets will change hands, but ExxonMobil employees working on the assets operated by the company for more than five decades will transfer to Woodside.

In a statement, Woodside said it would pursue a “value maximisation strategy” focused on production and reliability improvements at the historic assets.

“As a proudly Australian company, Woodside supports essential domestic energy needs in both Western Australia through the North West Shelf, Pluto and Macedon operations, and on the east coast through its equity participation in Bass Strait,” Woodside’s Australian chief operating officer Liz Westcott said.

“Taking operatorship of Bass Strait demonstrates Woodside’s continued commitment to meeting Australia’s domestic energy demand while maximising the value of existing infrastructure.”

The Bass Strait assets incorporate the Gippsland Basin and Kipper Unit joint ventures, with Woodside and ExxonMobil each holding a 50 per cent interest in the former and a 32.5 per cent interest in the latter – alongside Mitsui.

Production from the assets is 100 per cent dedicated to the Australian domestic market and currently supplies approximately 40 per cent of demand on the east coast – where the ACCC recently warned of the risk of a shortfall as soon as the December quarter of this year.

The market is not served with a mechanism like that of Western Australia’s Domestic Gas Reservation Policy, allowing the bulk of producers to export 100 per cent of their uncontracted gas as LNG if they see fit.

If they do so, the ACCC is projecting a 2 petajoule shortfall in the east coast market by the end of this year.

Fears over a gas shortage have heightened in the wake of a move from an Abu Dhabi-led business consortium to acquire Santos for $36.4 billion, given the energy climate.

Woodside said the agreement it struck with ExxonMobil would give it flexibility to pursue development opportunities in Bass Strait, including four potential development wells that it says could deliver 200 petajoules of new gas into the local market.

The agreement would allow Woodside to solely develop those wells through the Bass Strait infrastructure, subject to further technical maturation and a final investment decision.

ExxonMobil Australia chair Simon Younger said the company remained committed to contributing to the Australian gas market.

“After operating the Gippsland Basin Joint Venture for more than 50 years, we are proud to be handing over the reins and transitioning our highly experienced Bass Strait workforce to our valued partner Woodside, a world class operator,” he said.

“We look forward to working with Woodside as it continues to maximise Gippsland Basin production.”

Woodside shares were up 1.3 per cent at 9.10am.