New gas fields to come on stream

NEWS THAT A one billion pound investment to develop two new gas fields to west of Shetland has been given the green light by the UK government has been welcomed locally.

The Edradour and Glenlivet gas fields, owned by French oil and gas giant Total (80 per cent) and Danish state company DONG (20 per cent), will be connected to the new Laggan-Tormore infrastructure.

The two fields are expected to hold gas reserves of 65 million barrels of oil equivalent.

The news comes amid speculation that Total is looking at selling some of its interests in the Laggan-Tormore project which includes the under construction Shetland Gas Plant.

Following significant construction delays, it is hoped the project will finally begin bringing gas ashore later this year.

When the Edradour and Glenlivet fields start producing gas – expected to be within three and a half years – it will ultimately rise to the equivalent of 38,000 barrels a day, making Total the biggest producer in UK waters.

SIC development committee chairman Alastair Cooper said it would provide welcome stability for the onshore infrastructure next to Sullom Voe: “It’s going to provide continuity and increased production for the Shetland Gas Plant.

“I think it could be the first of a number of tie-ins – there’s a number of gas fields in the area. We’re looking for more.”

Northern Isles MP Alistair Carmichael described it as “exceptionally good news at a time when there has been some uncertainty because of the slump in oil prices”.

“To know that gas fields continue to come on stream is reassuring,” Carmichael told Shetland News. “The work to the west of Shetland is challenging because of the very deep water and the team at Total are to be congratulated for work that is at the cutting edge of oil and gas exploration.”

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Energy minister Matt Hancock said the approval demonstrated that the UK’s North Sea oil and gas industry still had a bright future. The announcement comes a week after George Osborne’s budget reduced its tax burden.

“These new fields have around 10 years of production ahead of them,” Hancock said, “which means security for workers both offshore and employed through the associated supply chain.”

The two gas fields are about 75 kilometres to the north west of Shetland. First gas is expected in the third quarter of 2018.

A Total spokesman said the company was continuing to develop its presence in the region, adding the Edradour and Glenlivet project “underlines the importance of the west of Shetland as a core strategic hub for Total”.

Although it has not commented directly, the French energy giant is not disputing a story in the Financial Times earlier this month stating it was looking to sell a 20 per cent stake in the deep water Laggan-Tormore project and was sounding out possibly buyers.