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    Shell, Ithaca Approve UK Field Boost

Summary

The Pierce oilfield will switch over to gas production.

by: William Powell

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Natural Gas & LNG News, Europe, Corporate, Exploration & Production, News By Country, United Kingdom

Shell, Ithaca Approve UK Field Boost

Anglo-Dutch major Shell and its partner Ithaca Energy have taken a final investment decision on the Pierce Depressurisation Project in the UK Central North Sea, operator Shell said October 3.

The move will enable Shell to start exporting gas from the Pierce oilfield which so far has been reinjected to maintain oil output. It builds on Shell's significant presence in the North Sea and works to help maximise the economic recovery of oil and gas from beneath UK waters, it said.

"This important development of the Pierce field will allow us to unlock additional gas reserves for the UK's homes and businesses, and value for our shareholders," said Shell. "It is Shell's eighth final investment decision in the UK Continental Shelf since the start of 2018. Each is part of a careful and cost-effective strategic expansion of our North Sea capacity, in line with our core upstream focus on profitable investments and competitive growth opportunities."

The investment will go towards modifying the existing floating production, support and offloading (FPSO) vessel, the Haewene Brim, which is owned and operated by Bluewater. The work also includes installing a sub-sea gas export line from the FPSO to the Segal pipeline, and drilling wells.

The Segal system is made up of two wet gas transportation pipelines, the St Fergus gas terminal, Fife NGL terminal and Braefoot Bay tanker loading facility in Scotland. Wet gas is transported from the Northern North Sea along the Far north Liquids and Associated Gas System line to St. Fergus and from the Central North Sea along the Fulmar Gas Line (FGL).

The Pierce development work has Oil & Gas Authority approval and will take place between 2020 and 2021. The Pierce field is then expected to produce more than 30,000 barrels of oil equivalent (boe)/day at peak production. The breakeven price of output is $20/boe.  The break-even price referenced is based on full life cycle economics inclusive of incremental costs associated with the depressurisation project since first capital spend, Shell said.

Pierce is a joint venture between Shell (Shell share 92.52%) and Ithaca Energy (UK) Limited (Ithaca share 7.48%).