IOG marks ‘historic milestone’ as first gas flows from UK project
UK player IOG plc has kicked into gear the production at its Saturn Banks Project – Phase 1, located in the UK sector of the North Sea, and achieved the first gas following multiple delays.
Back in February 2022, stormy weather conditions hindered the execution of final works required to be checked off the list before bringing the Saturn Banks Project – Phase 1 online. As a result, the timeline for backgassing was moved to the week beginning on 28 February with the first gas expected approximately a week later.
In an update last week, IOG revealed it was finishing the final works required for the start-up of this project – including pipeline backgassing – to bring it online the following week.
The company confirmed in its statement on Monday that the first gas from Phase 1 of its Saturn Banks Project has now been achieved.
Fiona MacAulay, Chair of IOG, commented: “I am hugely proud of everyone in our team for overcoming the many challenges to deliver this historic milestone, going from Final Investment Decision to the first production in under two and a half years.
“With heightened energy security risks across Europe and the continued urgency of the energy transition, there has never been a more important time to bring new UK gas resources on stream. This is especially true of IOG’s gas which has far lower carbon intensity than imports.”
IOG explained that the backgassing of the pipeline system was successfully completed over the past week, after the final commissioning of the Saturn Banks Reception Facilities (SBRF) at the Bacton terminal. This enabled the planned start-up sequence, with Blythe as the first well to be opened up. The firm further confirmed that the forward flow started into the SBRF on Sunday, 13 March 2021.
Furthermore, the Elgood well is planned to start up in the next two days and an initial view on flow rates will be assessed once stable production has been established from both fields, according to IOG. The reservoir performance data will be analysed over the initial months of production to inform an annual production guidance range.
The IOG-operated Saturn Banks Project – Phase 1 – sanctioned in October 2019 – consists of Blythe, Elgood, and Southwark fields in the UK Southern North Sea. IOG holds 50 per cent and its partner CalEnergy Resources holds the other 50 per cent interest in this project.
Andrew Hockey, CEO of IOG, remarked: “Phase 1 first gas is just the first step on a bigger journey, giving us the operational platform and financial capacity to deliver multiple further phases of growth. By delivering domestic gas supplies through our co-owned infrastructure on a Scope 1 and 2 net-zero basis we can generate strong and sustainable returns for shareholders.”
The company further elaborated that the entire Saturn Banks offshore system, including the platforms, pipelines, associated subsea equipment and production wells, will be normally unmanned with remote operation from the control room at Bacton terminal, helping to minimise operating costs and carbon intensity over time.
Alistair Macfarlane, Area Manager – Southern North Sea and East Irish Sea at the Oil and Gas Authority, stated: “As the UK transitions to net-zero it will need a stable and secure supply of domestic gas to reduce its reliance on imports, which often have a larger carbon footprint, and so the first production from the Saturn Banks project is a positive development.”
As previously reported, IOG is also planning to sanction another development as part of the Saturn Banks Project – Phase 2. The first Phase 2 field to be developed is expected to be Nailsworth, which lies 19km northwest of the Southwark field in water depths of 25-40 metres.
IOG and its partner CalEnergy are assessing the most economically and environmentally attractive concept as Nailsworth gas is expected to be evacuated via the Southwark platform and Saturn Banks Pipeline System.
It is also worth mentioning that, before the first gas production started, IOG last Friday executed a new gas sales agreement with BP Gas Marketing, covering its equity gas from all of the Saturn Banks Phase 1 fields, plus the Nailsworth and Elland fields which are part of Phase 2, on a long-term basis with break clauses after September 2023.