IOG picks key contractor for support work on North Sea gas hubs
- Business & Finance
UK-based Independent Oil and Gas (IOG) has signed a letter of intent (LOI) with Offshore Design Engineering (ODE) to perform work on the Blythe Hub and Vulcan Satellites Hub development in the Southern North Sea.
IOG said on Wednesday that ODE’s work would start with technical and operational support ahead of the final investment decision (FID).
The workscope also includes the provision of extensive technical and operational support to IOG in both pre- and post-FID stages to deliver the project into production.
ODE will be responsible for the operational management of all IOG’s assets, the Thames Pipeline, and a network of in-field pipelines, with IOG continuing to be a 100% license owner and operator of all assets in the project.
Offshore Design Engineering would be the operations and maintenance contractor upon first gas, hosting IOG’s onshore operational base at its facilities in Great Yarmouth, close to the Bacton terminal.
The pre-FID technical and operational support work is due to start immediately while contract terms are being finalized.
The company added that pre-FID costs would be fully deferred and pre-first gas costs would be 50 percent deferred until first gas, reducing IOG’s funding requirements.
Mark Routh, CEO and interim chairman of IOG, said: “ODE has a wealth of relevant experience and manages several fields for other operators in the Southern Gas Basin of the UK North Sea, so we will benefit from synergies with their existing operations. In line with our commercial model, the cost deferrals also tangibly improve IOG’s funding position both before and after FID.
“We look forward to finalizing the contract with ODE and agreeing similar terms with other key contractors to continue delivering our gas hub strategy.”
Earlier this month, IOG signed a LOI with Heerema Fabrication Group for FEED and EPCI work on up to four normally unmanned installation platforms on the Blythe Hub and Vulcan Satellites Hub developments.