IOG adding further new gas flow into UK market

UK player IOG plc has kick-started production at another field, which is part of Phase 1 of its Saturn Banks Project in the UK sector of the North Sea, pumping it straight into the UK gas market.

Sanctioned in October 2019, the IOG-operated Saturn Banks Project – Phase 1 consists of BlytheElgood, and Southwark fields in the UK Southern North Sea. IOG holds a 50 per cent stake in this project and its partner CalEnergy Resources holds the remaining 50 per cent.

Saturn Banks Project Phase 1; Source: IOG
Saturn Banks Project Phase 1; Source: IOG

The project start-up was delayed in February 2022 due to stormy weather conditions, which hindered the execution of the final works required to bring it online. These issues moved the timeline for backgassing to the week beginning on 28 February and the first gas was pushed to the following week.

In a statement on Wednesday, IOG confirmed that the first gas has been achieved from the Elgood field, as part of Phase 1 of its Saturn Banks Project. The confirmation comes only two days after the firm reported the first gas at Blythe, which was achieved in under two and a half years after the Final Investment Decision (FID) was made.

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According to the company, Elgood was developed as a subsea tie-back to the Blythe platform, which is normally unmanned and controlled from the Bacton terminal. The field was brought into production on Tuesday. The firm intends to increase output following this achievement.

Andrew Hockey, CEO of IOG, commented: “I am very pleased to confirm that Blythe and Elgood fields have now both been started up, adding further new gas flow straight into the UK market. We look forward to building up through this early phase of start-up to establish stable production rates so that we can assess production guidance in due course.”

Blythe platform; Source: IOG
Blythe platform; Source: IOG

The UK player further explained that an initial view on flow rates will be assessed once stable production has been established from both fields. The firm plans to analyse reservoir performance data over the initial months of production to inform an annual production guidance range.

“Developing further UK gas resources is the right thing to do both from an environmental and energy security perspective. We are encouraged by the recent government discussions with industry and ministerial comments on supporting further investment in domestic gas supply, which is exactly what IOG stands for,” concluded Hockey.

When it comes to IOG’s activities related to delivering gas supply to the UK market, it is worth noting that last Friday, before the first gas production started, IOG executed a new gas sales agreement with BP Gas Marketing. This deal covers IOG’s equity gas from all of the Saturn Banks Phase 1 fields, along with the Nailsworth and Elland fields – which the firm plans to sanction as a part of Phase 2 development – on a long-term basis with break clauses after September 2023.