Independent Oil and Gas has agreed to acquire the recently decommissioned Thames Gas Pipeline in the southern North Sea for a nominal consideration from Perenco, Tullow Oil and Centrica.
The pipeline will provide a proposed export route for IOG’s southern North Sea assets, comprising the Blythe and Vulcan Satellite hubs, to Bacton Gas Terminal. Estimated initial capacity of the 24in Thames pipeline is 300 Mcf/d.
IOG will own 100% and operate the pipeline giving the company control from field to market.
Completion is subject to regulatory consents and provision of security to Perenco to cover the cost of additional pipeline integrity surveys that may be required in the future (estimated maximum cost of £500,000).
Upon completion of the acquisition IOG will undertake an intelligent pigging inspection to ensure the pipeline’s integrity for safe re-use. When completed, the company intends to export gas from IOG’s Blythe and Vulcan Satellite hubs, once they are in production.
These two hubs require an estimated maximum throughput of approximately 150 Mcfd. This will mean it can accommodate the export of gas from the Harvey discovery, subject to its successful appraisal.
Ahead of first gas, IOG intends to acquire the onshore reception facilities at the Perenco Bacton terminal.
Mark Routh, CEO and Interim Chairman of IOG, commented: "We acquired most of our SNS gas portfolio at low cost because the assets in this area were considered stranded without a viable export route. This acquisition allays those concerns and is therefore of great importance to IOG as we now have a route to market for our gas. Subject to completion and remediation it will enable us to deliver up to half a trillion cubic feet of gas resources to the UK market over a period of 15-20 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 and is entirely in line with the principles of Maximising Economic Recovery, as championed by the UK Oil and Gas Authority."