Partners Take Danish Tyra Field FID
The Danish Underground Consortium (DUC) has approved an investment of some Danish krone 21bn ($3.4bn) in the full redevelopment of the Tyra gas field, operator Maersk Oil said December 1. The announcement follows the Danish parliament’s approval to implement legislation to secure the investment, without which the output from other fields would have been unable to reach market. The government came up with a package of tax changes in March that were seen as key to its survival.
The redevelopment of Tyra ensures continued production from Denmark’s largest gas field for at least another 25 years, and will protect and rejuvenate important Danish North Sea infrastructure, DUC said.
At peak production, the redeveloped Tyra gas field will provide enough gas to supply 1.5mn Danish homes, supporting energy security, future tax revenues and employment for Denmark.
The investment cost for the modification to existing facilities and construction of new facilities (capex) is estimated at about Dkr17bn and the cost in relation to removal and decommissioning of current facilities is about Dkr4bn.
Extending the life of the Danish North Sea
Tyra is the centre of Denmark’s national energy infrastructure, processing 90% of the nation’s gas production. Through new development projects and third party tie-ins, the redevelopment of Tyra can be a catalyst for extending the life of the Danish North Sea – not just for Maersk Oil and the DUC, but also for Denmark.
The new infrastructure can enable operators to pursue new gas projects in the northern part of the North Sea, where the most recent development, Tyra Southeast, delivered first gas in 2015 and is producing above expectations.
The redeveloped Tyra is expected to deliver some 40,000 barrels of oil equivalent/day of gas and 20,000 b/d of oil at peak, and it is estimated that the redevelopment can enable the production of more than 200mn boe.
Maersk Oil CEO Gretchen Watkins said: “Tyra has been a key asset in the history of Maersk Oil, and an important source of energy security for Denmark. The redevelopment of Tyra is the largest investment carried out in the Danish North Sea, and when completed in 2022, production from the Tyra field itself has the potential to cover Danish gas consumption for a decade.”
Protecting shared interests
The redevelopment of Tyra is enabled by the legislation implemented by parliament November 28-30. Energy minister Lars Lilleholt said: “I am pleased that the DUC partners have made the final decision for this investment. The full reconstruction of Tyra is vital to the development of the Danish North Sea oil and gas sector. Not just to Maersk Oil – but to many companies relying on Tyra as a central gas hub.”
Maersk Oil’s Chief Operating Officer, Martin Rune Pedersen, said: “The redevelopment of Tyra is evidence of a shared interest in prolonging the life of the Danish North Sea. The investment in this globally significant oil and gas project will support several thousand Danish jobs, and it can enable future significant industry investments in new development projects made possible by the redeveloped Tyra gas infrastructure.”
The Tyra field will be shut-in for the redevelopment in November 2019, and production is expected to recommmence in July 20. Operated by Maersk Oil with 31.2%, with Anglo-Dutch Shell (36.8%), Nordsofonden (20%) and US Chevron (12%).
Maersk group is selling its interest in Maersk Oil to French oil major Total under a 7.45bn euro transaction that recently secured EU approval but has yet to complete.