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Shell to launch gas expansion project at UK's Pierce field

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London — Shell and its partner Ithaca Energy have taken a final investment decision to build new gas production facilities at the UK's Pierce field in the Central North Sea.

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The Pierce Depressurisation Project will enable Shell to start exporting gas from the Pierce field via the SEGAL pipeline to St Fergus in Scotland, the site of one of the UK's main gas terminals, Shell said.

The development work is scheduled to take place between 2020 and 2021 and, when complete, the Pierce field is expected to produce more than 30,000 b/d oil equivalent at peak production, the oil major said. According to government figures, the oil and gas field was producing about 11,000 b/d of oil and 80 MMcf/d of gas during the first half of the year.

Under the new project, the field's existing floating production, storage and offloading (FPSO) vessel will be modified, in addition to a new subsea gas export line to the SEGAL pipeline system and the drilling of new wells.

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No details on the expected cost of the project or the gas volumes were given but Shell said the breakeven price of the new development is $20/boe.

"This important development of the Pierce field will allow us to unlock additional gas reserves for the UK's homes and businesses, and value for our shareholders," director of Shell UK Steve Phimister said in a statement.

Brought on stream in 1999, the Pierce field lies around 165 miles east of Aberdeen in Blocks 23/22a and 23/27 of the UK Continental Shelf sector of the North Sea.

Shell operates the Pierce field with 92.52% stake and Ithaca Energy holds the remaining 7.48% share.

-- Robert Perkins, robert.perkins@spglobal.com

-- Edited by Alisdair Bowles, alisdair.bowles@spglobal.com