US oil major Chevron has commenced production on one of the oldest North Sea gas discoveries today in what has been hailed as a significant technological achievement creating hundreds of jobs in the UK.
The Alder field, around 100 miles from the Scottish coast, was discovered 40 years ago and is expected to produce up to 110 million cubic feet of gas and 14,000 barrels of gas condensate per day at its peak.
Chevron has hailed its unique partnership with its co-owner of the field, ConocoPhillips, as well as a number of technological “firsts” for reaching first gas on schedule. The operator commissioned the project early in 2014 when the UK government approved the scheme. Production is expected to ramp up in the coming months.
Chevron has not given an overall cost to the scheme, but it has been estimated to be around £1.5billion. The oil company has said it spent £440million with UK-based supply chain companies including Schlumberger, OneSubsea and Technip. The firm said more than 70% of the budget was invested with UK-based businesses supporting hundreds of jobs in the north-east, as well as in Leeds and Newcastle.
The field, a high-pressure, high-temperature (HPHT) gas field, is one of the first to be “tied back” to a platform, the Britannia, which is operated by ConocoPhillips and in which Chevron has 32% stake. The field is connected to Britannia via a 28km pipeline, where Conoco has built a a new processing module alongside the existing platform. The tie back was considered the “most cost efficient” plan for taking gas from Alder, and has the added benefit of extending the life of the Britannia platform which started commercial production in 1998.
Richard Hinkley, general manager of Chevron’s upstream Europe business, said the UK’s expertise in subsea work was key to unlocking the field.
“That is what is unique about Alder, there are a lot of technology firsts that have been applied to this project. It was really that new technology being available to the market that allowed us to unlock the barrels on Alder,” he said.
He added: “That is the beauty of the UK. It has expertise in subsea. It is recognised globally to be expert in subsea. We have been very successful in leveraging that. We have been working closely with our supply chain.”
Greta Lydecker, managing director of Chevron Upstream Europe, said: “First gas at Alder represents a significant milestone for Chevron and highlights our commitment to investing and developing resources in the UK.
“The safe and successful completion of this project was underpinned by strong collaboration between Chevron and Alder co-venturer ConocoPhillips. Alder supports our goal of helping maximise the economic recovery of the UK, adds significant production to our portfolio and helps extend the field life of Britannia.”
Andy Samuel, chief executive of the OGA said: “We are very pleased to see the safe flow of first gas from the Alder field.Chevron’s application of innovative subsea technologies and use of the UK’s experienced suply chain is closely aligned to the maximising economic recovery strategy, adding reserves and extending the life of an existing asset.”
Dominic Macklon, president UK for ConocoPhillips, which holds a 26.3% stake in Alder, said: “The successful conclusion of the Alder project would not have been achieved without very close collaboration and coordination between the multi-disciplinary teams at Chevron and ConocoPhillips.
“Being a high pressure, high temperature field meant that numerous and complex interfaces had to managed in bringing on-stream this latest new development on the UKCS. Each company brought valuable expertise to the table and we are pleased to see the positive results for all key stakeholders.”
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