Shell confirms delay to Pierce North Sea project but first gas expected by year-end

Shell (LON:SHEL) is now targeting first gas from its Pierce redevelopment by the end of the year after confirming more delays at the North Sea project.

Chief financial officer Sinead Gorman provided a new timeline for start up on the development, which had been targeting first gas in Autumn, at a third quarter media results call on Thursday.

She said: “We had talked about expecting to get first gas through Autumn, we are still expecting that by year-end, we are slightly delayed on that but looking good so far.”

Pierce was first brought online in 1999 and is owned 92.52% by Shell, with the remaining 7.48% held by Ithaca Energy.

It has historically been an oil-producing field, with associated gas being compressed and reinjected.

This new project will allow for associated gas to be exported via a new pipeline to the St Fergus terminal in Aberdeenshire.

The Haewene Brim FPSO, being used for Pierce, underwent refurbishment in Norway earlier this year in preparation.

Penguins

It comes as delays have also been announced for the Penguins floating production storage and offloading vessel, which is set to be the first new manned vessel for Shell in the northern North Sea for 30 years.

Although asked for a sailaway date on the Penguins FPSO, Ms Gorman told Energy Voice that there is no confirmed date for when it will take to the North Sea, however, work on the vessel will continue.

The news of this delay is contradictory to Shell’s reports earlier this year that the Penguins project was “progressing well”, a line that Ms Gorman repeated.

Work has been hit hard by lockdown-related delays in China, with the FPSO initially having been expected in the UK in March 2021.

Cambo stakes

© Supplied by Sevan SSP/ Sembcorp

Ms Gorman also provided updates on the reports that Shell will be offloading its stakes in the Cambo field.

Explaining why the firm is pulling out of the project, its chief financial officer said: “Nothing has changed with our view of Cambo, it remains uneconomic from our perspective to be able to follow through on that and we are looking through our options with that.”

Shell began searching for buyers for its stake in the controversial Cambo field, which lies in the UK North Sea, earlier this year.

Reuters reported in August that the supermajor had launched a sale process to offload its 30% interest in the West of Shetland project.

Despite confirming that the company’s stance on Cambo had not changed, Shell did not confirm if it had a buyer.