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(Sharecast News) - Kistos, a joint venture partner in the Greater Laggan Area (GLA) and co-owner of the Shetland Gas Plant, responded to the North Sea Transition Authority's (NSTA) decision to grant development and production consent for the Victory Gas Field, operated by Shell UK, on Thursday.
The AIM-traded firm said the grant followed an environmental impact assessment conducted by the Offshore Petroleum Regulator for Environment and Decommissioning (OPRED).
Located around 29 miles northwest of the Shetland Islands, the Victory Gas Field is estimated to hold a P50 recoverable resource of 179 billion cubic feet, equivalent to about 7% of the UK's annual natural gas consumption.
Gas extracted from the Victory Gas Field would be developed through a single subsea tie-back well connected to GLA infrastructure, and subsequently transported to the Shetland Gas Plant.
It was expected that the field would start production in the middle of the current decade, with peak production levels projected at 150 million cubic feet of gas per day.
The company said the addition of Victory Gas Field production would significantly boost the throughput capacity at the Shetland Gas Plant, extending the lifespan of the Greater Laggan Area while simultaneously reducing the overall unit operating costs.
Kistos also said that, as of the end of the 2023 calendar year, its cash and near-cash balance stood at €275m including estimated tax receivables.
"We are delighted by the confidence of Shell in sanctioning this project and the support of the British government," said executive chairman Andrew Austin.
"As partners in the Shetland Gas Plant, we are encouraged that the future of the installation is further underpinned by more hydrocarbons being produced through this quality infrastructure."
Austin said Kistos would benefit, along with the other partners, through more parties sharing the infrastructure and reducing operational expenditure while extending the life of the facility.
"As an active exploration, development, and production participant in the Greater Laggan Area, we look forward to working alongside our partners to support this important development for the UKCS and the West of Shetland region."
At 1420 GMT, shares in Kistos Holdings were up 3.06% at 166.95p.
Reporting by Josh White for Sharecast.com.
