News Oil & Gas

IOG phase I capex to rise on slow progress at Bacton

IOG plc said it anticipated increased Phase I overspend of 20-25% as the company reported slower than expected progress at Bacton gas terminal.

Investigation: next steps and timing will be clearer on completion of survey data analysis (IOG / Exodus)

EXPENDITURE

IOG previously indicated that the gross “outturn” total Phase I capital expenditure was anticipated to exceed the original £305.5 million field development plan (FDP) budget by up to 10%.

The company today cited unplanned interruptions to the drilling campaign, additional requirements for offshore pre-operating activities and an expanded scope of subsea and pipeline installations for up to 20-25% over the FDP budget once the Southwark wells are completed.

“However, based upon our revised project schedule no additional financing requirement is currently expected to be required to bring all three Phase I fields on stream,” added IOG.

As a “prudent measure” the company has signed a €5 million working capital facility with a recognised international bank.

FIRST GAS

Perenco UK Ltd, which operates the construction and pre-commissioning works of Saturn Banks reception facilities (SBRF), reached 93% completion by 23 January.

IOG said that the on-site team had been expanded but safety limits and Covid-19 absences had restricted total personnel numbers.

“However, progress is being made and full readiness for commencement of back-gassing of the offshore pipeline system is targeted for mid-February,” added the company in a statement.

“First gas from both Blythe and Elgood is expected approximately a week thereafter.”

The company added it had handed over Blythe platform communications and Elgood subsea controls to the Bacton control room.

Day and night shifts are completing the final electrical and instrumentation, construction and pre-commissioning, and system leak testing.

EFFORT

Chief executive Andrew Hockey was today on site at Bacton onshore terminal reviewing the latest progress.

“Although it is very frustrating that it has been slower than planned, we are making every effort with the terminal operator Perenco to facilitate the fastest possible resolution.”