First gas on the southern North Sea Breagh development could be delayed after further cost overruns on the project, it was announced today.
RWE Dea UK has said the cost and schedule overrun on Breagh was due to modification works being carried out at the Teesside Gas Processing Plant, where gas from the field would piped to for processing, according to Sterling Resources, which holds a 30% interest in the field.
This could mean first gas, which had been anticipated for the third quarter of this year, could be delayed to the fourth quarter.
This could push the total cost of the project up 4-5% than previously announced, to £590-£595million.
Sterling said: “Significant efforts are ongoing to evaluate the extent of the delay to start-up and the cost overruns associated therewith and identify and implement measures to mitigate any such delay and cost overrun.”
RWE, which owns 70% equity, said in March costs had overrun on Breagh by 17%, from £485-566million for the first phase of development.
Sterling said this was because of delays in pipeline work plus development drilling after the installation of the Breagh platform last year.
Development drilling started on field earlier this month. Sterling said drilling would be unaffected by any onshore delays and it was expected that four wells would be on-stream by the end of the year.
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