Independent Oil and Gas plc (IOG) has signed a Memorandum of Understanding (MoU) for 100% acquisition of a currently disused pipeline in the Southern North Sea (SNS). The pipeline will provide a proposed export route for the company’s Southern North Sea assets.
Discussions regarding the sale and purchase agreement (SPA) are at an advanced stage and all parties are committed to completing this documentation and concluding the acquisition at the earliest opportunity.
Under the terms of the SPA, IOG would also acquire the associated onshore reception facilities. IOG plans to use this pipeline as the main export route for all its SNS gas assets.
Upon acquisition of the pipeline, IOG will undertake an intelligent pigging inspection to assess the integrity of the pipeline and ensure that it is safe for re-use. The company then intends to re-commission the pipeline to enable evacuation of gas from both its Blythe and Vulcan Satellites hubs. This will require the installation of inter-field pipelines and tie-in points, as with any gas field development. With a 300 000 million ft3/d capacity, the pipeline could also accommodate export of the newly enlarged resources in the Harvey discovery, subject to further appraisal.
There may be potential for third-parties to use the pipeline, in which case IOG would benefit from tariff income.
By owning the pipeline, the company will incur no transportation tariffs, thus improving the economics of the SNS gas assets.
The consideration is for a nominal sum, with IOG agreeing to bear the liabilities for the future decommissioning of the pipeline and reception facilities.
Read the article online at: https://www.worldpipelines.com/contracts-and-tenders/16012017/independent-oil-and-gas-to-acquire-sns-pipeline/