Energy / Gas plant to be acquired by Serica Energy
Meanwhile production has started from the Victory field, which will see gas come through Shetland
THE SHETLAND Gas Plant is set to change hands – with Serica Energy now in line to be its new owner.
The company will also take on a 40 per cent operated stake in the Greater Laggan area gas fields to the West of Shetland.
It was announced in 2024 that TotalEnergies was set to sell the Shetland Gas Plant, and its stake in the Greater Laggan Area, to Prax.
But that deal was never concluded because Prax Group’s parent company State Oil went into administration earlier this year.
However, Serica has now clinched a deal to buy Prax Upstream Limited, with the acquisition including the agreements Prax had in place with Total.
Serica said the deal will provide the company with a hub in the West of Shetland basin with “multiple sources of organic growth potential”, including an infill well on the Tormore field, the Glendronach development, four exploration licences and “third-party throughput” opportunities at the gas plant.
The purchase agreement also includes the Lancaster oil field west of Shetland, which Prax had a 100 per cent interest in.
The company also highlighted the start-up of the Victory gas field north west of Shetland, which is set to be piped to the gas plant before heading to the Scottish mainland.
Owner and operator Shell confirmed today (Tuesday) that it has started production from the Victory field, which can produce around 150 million standard cubic feet of gas per day at full capacity.
The field is located around 47 kilometres north west of Shetland.
Shell UK Upstream senior vice president Simon Roddy said gas fields like Victory play a “crucial role in the UK’s energy security, and the country will rely on them for decades to come”.
“They provide an essential fuel we need now, and act as a partner to intermittent renewables as we move through the energy transition,” he added.
It is expected that Victory will then transfer to the new independent joint venture Adura by the end of 2025, which will be jointly owned by Shell and Equinor.
Commenting on Serica’s new acquisition, CEO Chris Cox said the deal “represents a further step in the delivery of our growth strategy – it diversifies our portfolio, increases our reserves and resources, and enhances near-term cashflows at an attractive valuation”.
A spokesman for TotalEnergies said: “Following Serica’s announcement that it has signed an agreement to acquire Prax Upstream, TotalEnergies confirms that on completion of that acquisition, Serica will also acquire the Prax entities who are party to the pre-existing sale and purchase agreements, with TotalEnergies, for a 40 per cent interest in the Greater Laggan Area and its West of Shetland exploration licences.
“TotalEnergies will now fully support Serica to acquire the Prax entity who will take over operatorship of the assets.
“We are committed to a smooth transition, while also ensuring continued safe operations at SGP [Shetland Gas Plant].”
Construction started on the Shetland Gas Plant in 2010 and six years later it was taking in gas from fields north west of the isles by pipeline.
The facility processes the gas and then sends it off again through a 230km pipeline which helps to take the export to the St Fergus Gas Terminal in Aberdeenshire.
Serica Energy is a British oil and gas company formed in 2004 which sees most of its production come from the Bruce, Keith, Rhum, Evelyn, Orlando, Gannet East and Columbus field located in the UK Northern and Central North Sea.
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