UK govt to speed up new energy projects, including five oil & gas developments
UK government plans to accelerate various energy projects, including five oil and gas developments as well as several carbon capture and storage (CCS), hydrogen, and offshore wind projects.
The United Kingdom currently faces a period of high inflation and the government has already taken steps to address high energy bills by announcing the Energy Price Guarantee, which means that a typical UK household will pay no more than £2,500 a year on their energy bill for the next two years, starting from 1 October.
As an additional effort to unlock private investments across the UK and cut the red tape to make it quicker to deliver the critical infrastructure, the Chancellor of the Exchequer, Kwasi Kwarteng, last Friday presented to the Parliament the government’s Growth Plan 2022.
5 UK oil & gas projects
Infrastructure projects from the oil and gas project that will be accelerated, aiming to get the vast majority starting construction by the end of 2023, include Murlach oil field development, Cambo Phase 1 field development, Talbot field development, Affleck redevelopment, and Victory field development.
According to the government, these projects may benefit from acceleration through planning reform, regulatory reform, improved processes or other options to speed up their development and construction, including through development consent processes.
Murlach is a BP-operated oil field development located in the Central North Sea approximately 203 km east of the Aberdeenshire coastline, Scotland. This is a new project to redevelop the field formerly known as Skua.
BP filed its Environmental Statement for the Murlach project to the UK authorities on 14 April. The project involves the drilling of two production wells tied back to a new manifold, installation of a c. 7 km gas lift flowline from the existing Eastern Trough Area Project (ETAP) platform to the new Murlach manifold and tie-ins to the repurposed Heron A production flowline, Heron to Seagull wash water flowline system and existing Seagull umbilical. The first oil is expected in 2Q 2025.
The controversial Cambo project needs no special introduction as it has been hitting the headlines since last year due to strong opposition from environmental groups. The project was previously supposed to be developed by Siccar Point Energy as the operator and Shell as a partner but Shell withdrew from it late last year and Siccar Point was earlier this year taken over by Ithaca Energy, which now plans to move ahead with the development. The final investment decision (FID) for the Cambo project is expected next year.
Talbot is a Harbour Energy-operated project in the North Sea for which the environmental statement was submitted to the authorities in late May this year with expectations to achieve the first oil in 3Q 2024.
The Talbot development project is a discovered light-oil and associated gas resource opportunity. The primary nature of this project will be for a multi-well subsea tie-back of the Talbot field to the Judy platform and the subsequent export of produced hydrocarbons to Teesside, UK.
Harbour’s Judy platform was also selected as the preferred tie-back option for the NEO Energy-operated Affleck redevelopment, which will entail a subsea tie-back. As reported in early August 2022, the ES for this redevelopment project was also already lodged with the UK authorities. The first oil is expected in 2Q 2024 at the earliest.
Finally, the ES for Corallian Energy’s Victory gas field located in the West of Shetland was submitted in early July 2022. The field will be developed via a single subsea well tied back via a new 16.2km, 14-inch pipeline to one of the hot tap tees installed in TotalEnergies’ existing Greater Laggan Area (GLA) network infrastructure. Control of the well will be from TotalEnergies’ Edradour manifold, located approximately 18 km to the west-southwest, via a new umbilical. The first gas is targeted for 4Q 2024.
CCS, hydrogen, and offshore wind
In the CCS realm, the government plans to speed up Hynet Cluster – CCUS cluster in the North West; and the East Coast Cluster – CCUS cluster in Teesside and Humber.
Hydrogen projects included in the plan are Hynet Hydrogen Pipeline, INOVYN Hydrogen Storage (Hynet Cluster, NW), East Coast Cluster Hydrogen Pipeline, Aldbrough Hydrogen Storage (East Coast Cluster, Humber), and Hydrogen Electrolyser Capacity Deployment.
Finally, offshore wind-related projects included in the plan are Remaining Round 3 Projects, Round 4 Projects, Extension Projects, Scotwind Projects, INTOG Projects, Floating Wind Commercialisation Projects, and Celtic Sea Projects.