A flagship North Sea project has finally achieved first gas after being beset by a series of delays.
IOG said its key project Saturn Banks finally delivered first production to the Bacton Terminal on England’s east coast yesterday.
The development is an amalgamation of several discoveries containing around 410 billion cubic feet of gas in the Southern North Sea.
Chief executive Andrew Hockey said: “I am immensely grateful to the whole IOG team for their determined efforts to achieve this major target.
“Phase 1 First Gas is just the first step on a bigger journey, giving us the operational platform and financial capacity to deliver multiple further phases of growth.
“By delivering domestic gas supplies through our co-owned infrastructure on a Scope 1 and 2 Net Zero basis we can generate strong and sustainable returns for shareholders.”
Although comparatively modest, Saturn Banks creates a new production hub in the Southern North Sea, with new surrounding discoveries which can be tied back.
Development of another field, Nailsworth, is expected to begin this year, IOG told Energy Voice earlier this month, with a view to production towards the end of 2023.
Yesterday saw production of the Blythe well – part of phase 1 – opened up, with the Elgood well to follow in the next two days.
The project has faced numerous issues and delays, ranging from a problem with rig stability at the Southwark field to Covid-related woes and even storms battering the UK pushing back first production.
Two wells at the Southwark field, which also forms part of phase one, is expected to be completed in the coming months.
On the new production, IOG said it will analyse reservoir performance data “over the initial months” to inform an annual production guidance range.
It comes as IOG is due to release its 2021 financial results later this week.
Chair Fiona MacAulay said: “I am hugely proud of everyone in our team for overcoming the many challenges to deliver this historic milestone, going from Final Investment Decision to first production in under two and a half years. Through constructive collaboration, guided by our values of resourcefulness, innovation, drive, efficiency, resilience and safety, we have transformed IOG from an unfunded start-up to a gas producer expected to generate significant cashflow this year and into the future.
“With heightened energy security risks across Europe and the continued urgency of the energy transition, there has never been a more important time to bring new UK gas resources onstream. This is especially true of IOG’s gas which has far lower carbon intensity than imports.”
Alistair Macfarlane, Area Manager – Southern North Sea and East Irish Sea at the Oil and Gas Authority, added: “As the UK transitions to net zero it will need a stable and secure supply of domestic gas to reduce its reliance on imports, which often have a larger carbon footprint, and so first production from the Saturn Banks project is a positive development.”
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