IOG To Buy Pipe for North Sea Fields
UK-based Independent Oil and Gas has agreed to buy signed the recently decommissioned Thames Gas Pipeline in the UK Southern North Sea for “a nominal consideration” from fellow producers Perenco, Tullow and Centrica, and "breathe fresh life" in the mature offshore area.
IOG said April 11 it will evacuate gas from its 100% operated Blythe and Vulcan satellite hub fields into the Bacton terminal – which it also plans to buy at some point. The estimated initial capacity of the 24-inch Thames pipeline is 300mn ft³/d.
IOG will own 100% and operate the pipeline giving the company control from field to market. It noted that no tariff will be payable for transportation of its gas to Bacton, but that a processing tariff will be payable to Perenco, the Bacton terminal owner.
Completion is subject to regulatory consents and provision of security to Perenco to cover the estimated maximum £0.5mn ($0.62mn) cost of additional pipeline integrity surveys that may be required.
Upon completion of the acquisition IOG will undertake an intelligent pigging inspection to ensure the pipeline’s integrity for safe re-use. When completed, IOG intends to export gas from its Blythe and Vulcan Satellite hubs once in production. These two hubs require an estimated maximum throughput of some 150mn ft³/d, it said, which is well within the pipeline’s anticipated capacity.
IOG therefore expects the pipeline to have sufficient capacity to accommodate the export of gas from its 100%-owned Harvey discovery, subject to its successful appraisal.
Buying beach capacity
It also intends to buy the Perenco Bacton terminal on the Norfolk coast, and said that a period of exclusivity has been agreed until September 2018 to negotiate this, which would require providing Perenco with up to £2.5mn security for the pipe's eventual decommissioning prior to first gas flows.
(Credit: IOG)
IOG CEO Mark Routh (pictured above) said the deal “will enable us to deliver up to half a trillion cubic feet of gas resources to the UK market over a period of 15 to 20 years from the end of next year. We are also open to work with third parties who may wish to use our export facilities for a tariff. We believe this is the kind of innovation required to breathe new life into the Southern North Sea.”
Mark Smedley