UK junior Independent Oil and Gas has completed the acquisition of the Thames gas pipeline in the Southern North Sea and is now in talks about buying Perenco's terminal at the Bacton gas complex in eastern England, the company said Tuesday.
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IOG, which in September last year brought in US services heavyweight Schlumberger to help move its UK gas hub projects to final investment decision, sees its assets holding in excess of 0.5 Tcf (14.2 Bcm) of recoverable gas reserves and is targeting daily gas output of 180 MMcf/d (5 million cu m/d) from 2019.
"Opportunities for additional gas are being considered," the company added.
The recommissioning of the 300 MMcf/d capacity Thames pipeline is an "essential part" of the development of the company's Blythe and Vulcan Satellite hubs, allowing gas export to Bacton, IOG said.
IOG agreed to buy the pipeline -- which was idled -- from previous owners Perenco of France, and the UK's Tullow Oil and Spirit Energy, in April 2017 for a nominal fee of GBP1 ($1.29), giving the company a ready-made route for supplying gas to Bacton once it was recommissioned.
"This pipeline should allow for the tariff-free export of our 100% owned gas reserves that were otherwise stranded," IOG CEO Andrew Hockey said.
"Recommissioning of the pipeline may also facilitate the export of new resources that IOG may access and develop in future as well as other gas resources owned by third parties, who would pay a tariff," Hockey said.
In October 2017, IOG submitted the field development plan for the Vulcan Satellites hub development to the UK Oil and Gas Authority, having already submitted the plan for the Blythe hub in July last year.
The three-field Vulcan hub development is targeting first gas by the end of Q2 2019 alongside first gas from IOG's smaller Blythe hub.
"Ahead of first gas, the company intends to acquire the onshore reception facilities at the Perenco Bacton terminal," IOG said. "A period of exclusivity has been agreed until the end of September 2018."
UK gas production has been declining over the past decade, although the fall was stemmed over the last few years by some new field start-ups such as Total's Laggan-Tormore, Chevron's Alder and Engie's Cygnus.
Total output was 38 Bcm in 2017, according to data from S&P Global Platts Analytics, up from 36.8 Bcm in 2016.