UK IOG Snaps Up Bacton Infrastructure

London-listed Independent Oil & Gas (IOG) announced on July 24 it had struck a deal to acquire the Thames pipeline reception facilities at the UK’s Bacton gas terminal from Perenco, Spirit Energy and Tullow Oil. 

IOG already operates the Thames pipeline and by taking control of its reception facilities, the company will be able to oversee their refurbishment and co-ordinate maintenance and so on to handle future gas supplies from its flagship core project in the North Sea.

According to IOG CEO Andrew Hockey, the purchase will be “key” in achieving a farm-out deal and taking a final investment decision (FID) on its upstream development.

IOG is focusing on six discoveries in the southern North Sea with an estimated 302bn ft³ of 2P gas reserves. IOG expects the development to flow 146mn ft³/day of gas at peak capacity. After being received onshore, this gas will be transported to Perenco’s Bacton plant for processing and then pumped into the UK’s national gas grid.

“We are very pleased to have progressed to signing the Thames Reception Facilities sale and purchase agreement, which has required meticulous resolution of a number of legal complexities by working collaboratively with a range of parties,” Hockey said. “IOG is now set to be an infrastructure owner both offshore and onshore, which offers a substantial competitive advantage for an upstream company of our size and further de-risks our substantial proven gas portfolio.”

IOG did not reveal the deal’s price tag.

The company also noted that it planned to spud an appraisal well on August 3 at the Harvey gas discovery using the Maersk Resilient rig.

"Given its potential size and synergies with our other assets, Harvey has the potential to create significant shareholder value," Hockey said.

Perenco is also considering the broader sale of its UK upstream business, which it bought from BP some years ago, having been approached by one possible buyer.