Ineos Piles into UK Far North Gas Prospects
Privately-owned petrochemical producer Ineos is to expand its UK upstream asset base by acquiring a majority interest in two UK West of Shetland gas licences from UK independent Siccar Point Energy.
Siccar will reduce its 100% interests in P1854 and P1935, which contain the significant Lyon prospect, down to 33.34%. Ineos will then hold 66.666% interests in each.
Ineos upstream chief Geir Tuft said November 21 its aim was “to take a leading role to develop the Northern Gas Fields using the significant infrastructure investments already made West of Shetland.”
“With the purchase of the Dong E&P business earlier in the year, Ineos took over a significant portfolio of producing assets and discoveries West of Shetland,” added Tuft: “The Northern Gas fields West of Shetland offer one of the most exciting prospects in British offshore waters. Ineos completed the $1.05bn Dong E&P acquisition in September 2017.
Siccar CEO Jonathan Roger remarked: “As licence operator, we are excited to be moving forward in conjunction with Ineos to drill the Lyon prospect. This represents an opportunity to unlock the material gas potential of the most northerly licensed area of the UKCS.” Neither company divulged details of the transaction value.
Ineos now has positions in the four fields that make up the Lyon cluster: Lyon, Tobermory, Bunnehaven and Cragganmore. Both firms said that initial survey work indicates extensive gas reserves in the cluster of between 3 trillion and 5 trillion ft3 (85bn to 142bn m3) of gas in place, which would match North Sea gas fields such as Elgin-Franklin, Britannia and the Total-operated West of Shetlands Laggan-Tormore field. Tobermory and Bunnehaven licence interests are Siccar 17.50%, Ineos 32.5%, Total 30% as operator, and UK utility SSE 20%.
A year ago Siccar agreed to buy Austrian OMV’s significant entire UK upstream portfolio for around $1bn, including West of Shetland interests. That deal was completed in January 2017. Aberdeen-based Siccar is backed by two private equity funds: Blue Water Energy and Blackstone Energy Partners.
Ineos to ship US ethane to China
Two years after its pioneering import of US ethane into Europe for use in its chemicals plants, Ineos announced November 20 a long-term supply agreement to deliver ethane produced from US shale gas -- for the first time ever -- to China for Singapore-based SP Chemicals.
The deal will involve the construction of a 95,000m3 capacity 'very large ethane carrier' (VLEC) ship, expected to be delivered in 2019, which will be the largest ever built. It will ship US ethane to SP Chemicals’ new gas cracker facility, under construction in Taixing, China. As with the Ineos ships used for deliveries to Europe, this vessel will be operated by Danish shipowner Evergas and will be its first VLEC (in its fleet of 23 gas ships).