March 17 (Reuters) - ExxonMobil's ( XOM ) Australian

unit said on Monday that its Gippsland Basin joint venture with

Woodside Energy ( WDS ) has approved its final investment

decision to develop the Turrum Phase 3 project, targeting

underdeveloped gas resources.

The approval is for the A$350 million ($221.31 million)

project, which aims to drill five new wells in the Turrum and

North Turrum gas fields.

Earlier this year, Australia's competition regulator flagged

that the east coast could face gas shortage supply from 2027,

potentially leading to gas imports. The shortfall is expected

due to structural decline and uncertainty surrounding future

investments.

"While depletion of the Gippsland Basin is inevitable,

projects such as Turrum will ensure Bass Strait continues to

produce gas for the domestic market past 2030," said Simon

Younger, Chair of ExxonMobil Australia in an emailed response to

Reuters.

The Gippsland Basin joint venture is a 50-50 joint venture

between Esso Australia Resources and Woodside Energy ( WDS ) (Bass

Strait), and operated by Esso Australia.

"The Turrum Phase 3 project, and the recently approved

Kipper 1B project, will unlock additional gas that is needed to

avoid future shortfalls," said Liz Westcott, Woodside's

executive vice president and chief operating officer for its

Australian operations in a separate statement.

"Every molecule of gas Woodside supplies from the Bass

Strait fields is sold into the Australian domestic market for

local manufacturers, power generators and homes."

($1 = 1.5815 Australian dollars)