Independent Oil and Gas (IOG) has signed a memorandum of understanding (MOU) to acquire a currently disused pipeline in the southern North Sea and associated onshore reception facilities.
The pipeline will provide the proposed export route for IOG's southern North Sea gas assets. But, IOG wouldn't say what the pipeline would tie in to offshore, if it has existing infrastructure it could tie in to or if it would need new infrastructure.
Once the proposed purchase has completed, IOG says it will inspect the pipeline, then re-commission it to enable export from its Blythe hub and Vulcan Satellites hub. This will require the installation of inter-field pipelines and tie-in points.
With 300,000 MMcf/d capacity, the pipeline could also accommodate export of the Harvey discovery, subject to further appraisal.
First gas is expected from Blythe in 2H 2018, subject to completion of the development funding.
IOG also says results of analysis on its southern North Sea Skipper from well last year show high density oil of approximately 11 °API, which it says is a high viscosity and a high Total Acid Number. "However, the Skipper oil is mobile in the very high permeability reservoir and is also mobile at ambient conditions thanks to its very low wax content," the firm says.
IOG is doing further technical and commercial evaluation. If a field development plan can be designed to enable the economic extraction of oil from the Skipper field, the oil properties will present a challenge for refining and marketability, however, which means the firm will get less cash than it would otherwise for its oil.
IOG CEOMark Routh said: "This pipeline will be the cornerstone of our southern North Sea portfolio which, subject to remediation, will enable us to deliver our approximately 0.5 Tcf of gas resources to the UK market.
"The update on the Skipper crude quality has confirmed the earlier results and has provided us with some new data. The oil qualities are likely to be challenging, however given the oil's mobility in the reservoir we continue to explore the potential extraction and marketing options to deliver value from the asset."
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