News / SSE buys stake in new gas plant
ENERGY company Scottish & Southern Energy has confirmed that it is buying a 20 per cent stake in the Shetland Gas Plant from Total.
The French oil company is also selling 20 per cent interest in the Laggan, Tormore, Edradour and Glenlivit gas fields to SSE.
The £565million deal was confirmed on Wednesday morning. Total had said earlier this year that it wanted to reduce its financial exposure west of Shetland.
The other main shareholder in the development is the Danish oil company DONG, which also holds 20 per cent.
Meanwhile, pre-commissioning activities at the new £800 million gas plant are under way, and SSE said the facility next to the Sullom Voe Terminal is expected to commence production later this financial year with peak production of 500 million standard cubic feet per day to be reached in 2016.
The gas plant has been plagued with lengthy delays, which contruction firm Petrofac initially blamed on the weather and industrial action but later conceded was down to a lack of experience in working in environments with such “high labour costs and low productivity levels”. Production was originally scheduled for the first half of 2014.
SSE chief executive Alistair Philipps-Davies said the investment was a natural step forward for the company.
“Following extensive due diligence, we have agreed to acquire a series of very good assets and entered into a partnership with one of the world’s leading gas and oil companies.
“The acquisition, including the Shetland Gas Plant, represents further investment in the UK energy infrastructure that gives access to gas from northwest Europe to help secure energy for customers and to help meet the needs of our gas-fired power stations, which will have an important part to play in supporting security of electricity supply,” he said.
Arnaud Breuillac, president of exploration & production at Total added: “The sale of these minority interests is aligned with Total’s portfolio management strategy and target of divesting $5 billion of assets in 2015.
“It allows us to capitalize fully on this new deep offshore development, while retaining a majority interest and operatorship.
“With the upcoming start-up of Laggan, followed by Tormore, Edradour and Glenlivet in the coming years, Total is opening up a new frontier area for gas production in the United Kingdom.”
SEE has also acquired 20 per cent interests in several exploration licenses located in the West of Shetland area, including the Tobermory discovery.
The company already has a 50 per cent stake in the Viking Energy wind farm project, planned to be built in the central mainland of Shetland in the coming years.
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