Dart Energy Starts Production at Airth, Scotland

International gas and energy group Dart Energy Limited has commenced first production and sales of electricity generated from natural gas gathered within coal seams at its Airth project (PEDL 133) in the Forth Valley, Scotland.

The Airth project is located 50 km west of Edinburgh and is the next step in a vision to deliver Europe’s first commercial CBM project of scale.

This first phase of the Airth Project produces electricity with gas from two pilot wells through a gas turbine generator which has a restriction of 100,000 scf/d to match the electricity transport capacity. Significantly higher flow rates have been recorded and peak production rates in excess of 1MMscf/d per well are anticipated at the Airth Project. Generated electricity will be exported to the local grid where it is expected to provide power equivalent to the needs of over 500 homes. This phase of the project has been designed with the potential to substantially upgrade power output over time.

The planned second phase of the Airth project will see production delivered from additional wells into the gas pipeline network and sold pursuant to the previously announced Gas Sales Agreement with Scottish and Southern Energy. The Gas Sales Agreement with SSE allows for delivery of up to approximately 11 BCF/a over a period of up to eight years. The gas price is linked to the prevailing spot market price (currently in the range of US$9 – US$10 per Mscf).

The second phase of the project will require the deployment of associated surface infrastructure (compression facilities and local pipeline connection) which will be completed during 2013. Field Development consent for this second phase has been granted by the UK Department of Energy and Climate Change and approval of updated technical plans is expected during 3Q 2012. Work on this phase of development is scheduled to commence in late 2012.

Longer term, the first and second phase of the Airth project encompasses less than 20% of the 2C resource within the project area, and thus there is considerable scope to increase the project over time, both in terms of size and gas sales.

Dart Energy International CEO John McGoldrick said: “Generation of electricity at PEDL133 is an important milestone for Dart Energy. It represents the company’s first commercial sales, and continues the progression of our Airth Project towards full development and substantial revenue generation. We are pleased to be at the forefront of bringing on-line a new supply of domestic natural gas to the UK which currently relies heavily upon imported supplies.”

Development of the first and second phases at Airth requires an initial investment of approximately US$80m in the period 2012 – 2013, which Dart expects to finance principally from the debt facility being finalised with HSBC.

[mappress]
LNG World News Staff, July 24, 2012