Spirit sells down stake in UK southern basin gasfield
Spirit Energy has sold a 38.75% stake in its Pegasus West discovery and surrounding acreage in the UK Southern North Sea to private equity firm Neptune Energy, the upstream arm of utility Centrica said May 4.
The Pegasus West Area "aligns interests in both the discovery and the Neptune-operated Cygnus gas facility (Neptune Energy 38.75% and operator, Spirit Energy 61.25%) enabling acceleration of the development of Pegasus West as a subsea tieback to the existing Cygnus field," Neptune said.
Neptune will work with Spirit Energy on front end engineering and design studies in 2021 with the intention to reach a final investment decision by year end. Once sanctioned, Neptune will operate the development through to first gas and into production.
Neptune’s UK head Alexandra Thomas said the alignment "offers material benefits of faster development, lower costs and lower carbon intensities as well as optimisation of production operations through our existing world-class gas production asset, Cygnus.
“Cygnus is strategically important for domestic gas supply to the UK, and has one of the lowest carbon intensities on the UKCS, at less than 2 kg CO2/barrel of oil equivalent. [The UKCS average is 22 kg CO2/boe]. The development of Pegasus West will ensure further UK low carbon gas supply, while opening up opportunities for development of other potential gas resources in the Greater Cygnus Area,” she said.
Spirit Energy is 69% owned by Centrica which had been trying to sell the stake along with other upstream assets in power generation until the market fell in 2020. It reportedly revived talks in December. Its partner is a German utility, Stadtwerke Munchen. The joint venture also has operations offshore Norway.