Maersk May Shut Key Danish Offshore Gas Hub

Maersk Oil said on April 4 that production from the Tyra East and Tyra West platforms in the Danish North Sea will cease on October 1 2018, unless an economically viable solution for continued operations is identified this year.

More than 90% of Denmark’s gas production is processed through the Tyra facilities so, under EU rules, any decision to halt production had to be notified to the market in a timely manner, because gas supply contracts may need to be renegotiated.

In 2014, Denmark produced 4.5bn m³ of gas. The Tyra facilities are the processing and export hub for all gas produced by the Danish Underground Consortium (DUC), including their main fields Tyra, Halfdan, Dan and several smaller ones.

Tyra is also operated by Maersk Oil on behalf of the DUC, a partnership between AP Moller–Maersk (31.2%), Shell (36.8%), Danish state Nordsofonden (20%) and Chevron (12.0%).

“Together with our partners in DUC we are now evaluating long-term economically viable solutions for recovery of the remaining resources. As part of this, we will consider the terms under which a rebuild of the facilities could take place. The basis for a decision needs to be in place by the end of 2016 to ensure future production from the field,” says Martin Rune Pedersen, Managing Director for Maersk Oil Denmark.

A Maersk Oil spokeswoman said that the platform at DUC's Gorm oil field offshore southwest Denmark includes some gas process capacity. However all gas from DUC fields, including Gorm, is routed via Tyra to Denmark.

The F3 pipe which connects Tyra West to the Dutch Nogat pipe could perhaps be part of a potential solution involving Gorm. However there are no Danish gas process platforms connected to F3/Nogat, except for Tyra. The F3 pipe, which has capacity to transport 5.5bn m³/yr, handled less than a tenth of that in 2014. A link to a map of DUC’s platforms and pipelines in the North Sea can be seen here.

Maersk declined to comment about possible costs of any alternative infrastructure solution, but said it had already spent more than Dkr1bn (€130mn) on reinforcing and shore up the structures on Tyra in order to prolong production. “Tyra’s facilities are approaching the end of their operational life due to a combination of more than 30 years of production and subsidence of the underground chalk reservoir,” it added.

Denmark consumed 2.7bn m³ in 2015, similar to the previous year, which means it can export small amounts to Netherlands, Germany and Sweden.

Falling oil and gas prices are forcing operators across the North Sea to reconsider how long to keep strategic, but ageing infrastructure going. Last week it became known that ConocoPhillips is evaluating all options, including closure, for its Theddlethorpe gas terminal on England’s east coast. Last week too Denmark’s Dong and partner Bayerngas Norge cancelled the contract for a planned platform at their Hejre oil field offshore Denmark; first oil had been due in 2017.

The Hess-operated Syd Arne oil and gasfield does not pipe its gas to shore via Tyra. Instead it goes through a dedicated line to Nybro. 

Danish gas production by field, 2014

Source: Danish Energy Agency

Mark Smedley