A £1.3billion North Sea field has delivered “first gas” in what has been described as a significant boost to UK energy security.
French energy company Engie said the Cygnus field 93 miles off the coast of Lincolnshire will soon be delivering 5% of UK gas production – enough to heat the equivalent of 1.5 million homes.
The firm’s flagship North Sea gas project was sanctioned in 2012 and represents a £1.3 billion investment. The development of the field, which is also owned by Centrica and German-owned firm, Bayerngas UK, supported nearly 5,000 jobs during its five year development period, Engie said.
The completion of the first stage of the project was described as “great news for the UK economy”, while production and expansion of the field will “help safeguard thousands of jobs at a crucial time for the sector”.
Deirdre Michie, chief executive or trade body Oil & Gas UK (OGUK), said the announcement was “very welcome at a challenging time for the UK oil and gas industry as a whole”.
She added: “This development, a joint-venture between Engie E&P, Centrica and Bayerngas will help to support a secure energy supply for the UK for an estimated 20 years.
“Importantly the project demonstrates the world-class capabilities of our supply chain, with over 80% of the contract work secured by British businesses.”
Callum McCaig MP for Aberdeen South said: “This should send a clear signal that the oil and gas industry across the UK has the expertise and potential to thrive and remain strong in a competitive energy market.
“Projects like this secure thousands of jobs at a time, so it is hugely beneficial to support further exploration and extraction.
“I hope this is a wakeup call to the UK Government to provide the tax changes and exploration incentives that are needed to ensure the undoubted potential of North Sea does not go to waste.”
Alexander Burnett, Scottish Conservative energy spokesman, hailed the announcement of first gas as “great news for the UK economy and will help safeguard thousands of jobs at a crucial time for the sector”.
He added: “It is a great example of the type of collaborative work that the UK Oil and Gas Authority is encouraging in the North Sea and further evidence of the strong stewardship of the industry by the Conservative government at Westminster.
“Furthermore, a project on this scale will provide energy security and bring real benefits to the supply chain – both north and south of the border.”
Engie’s UK boss Ruud Zoon said the firm was “extremely proud” of the achievement despite a one-year delay in delivering gas from the field to the Bacton gas terminal in North Norfolk.
The managing director of Engie E&P UK cited the complexity of the project for the delay, particularly ensuring the three bridge-linked platforms that make up the Cygnus Alpha rig complex were connected to the well heads in a safe manner.
Mr Zoon said: “Together we have successfully achieved first gas production and export from the Cygnus field. Over 5,000 colleagues, contractors and suppliers have contributed to this landmark development and, most importantly, have maintained an excellent safety record since the project was approved in 2012.
“First gas from Cygnus represents a significant boost to the UK’s long term energy security, with an estimated production life exceeding 20 years. Furthermore, with over 80% of the contract work secured by British businesses – including fabrication yards in Hartlepool, Methil and Burntisland – it is a showcase for the technical and commercial excellence of the UK oil and gas supply chain.”
The Cygnus complex, which will eventually have four platforms, a total of 10 wells and two subsea structures, is expected to achieve plateau production of 250 million cubic feet of gas per day.
Chris Cox, managing director of Centrica’s Exploration & Production business, described the first gas achievement as a milestone for the field’s investors.
He added: “The Cygnus field is hugely important to the country’s energy supply, so we are proud that gas is now flowing from the field and into homes and businesses across the UK.
Gerry Harrison, managing director of Bayerngas UK, said: “Most of the numbers related to this project are very large, for instance: investment, man hours, production levels, reserves, longevity.
“But perhaps the most important numbers are very small; our priority has always been safety and I am proud that Bayerngas has collaborated on a project with minimal Lost Time Incidents.
“We are looking forward to high levels of stable production and thank all those involved in Cygnus for their hard work and dedication.”
The partners said they were evaluating further opportunities in the Greater Cygnus area with the aim of bringing additional volumes of gas through Cygnus when capacity becomes available.
Andy Samuel, chief executive of the Oil & Gas Authority (OGA), said the partners demonstrated an “impressive collaborative effort”.
He added: “It represents a significant milestone for the Southern North Sea, delivering new volumes through existing infrastructure, utilising the UK’s skilled supply chain and helping create the right conditions for further developments.
“This is set to continue with the next phase of development from Cygnus Bravo which will bring additional capacity on stream in the future to deliver MER UK.”
Equity interests are operator Engie E&P UK (38.75%) and partners Centrica (48.75%) and Bayerngas (12.5%).
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