From Upstream22 Mar 2018 10:49
London-listed junior Independent Oil & Gas (IOG) is confident of completing its planned purchase of the Thames Pipeline in the UK southern basin this month, a move central to its ambitions of developing the Vulcan and Blythe gas hubs.
IOG had hoped to finalise the sales and purchase agreement for the 24-inch diameter export route by the end of February but said last week it is now expected during March, as preparations meanwhile begin for an inspection and intelligent pigging programme of the line.
IOG announced in April last year the acquisition from private player Perenco, Anglo-Irish independent Tullow Oil and Centrica Resources (now Spirit Energy) for a �nominal consideration�.
Andrew Hockey, IOG�s new chief executive, told Upstream: �We are very close to completing the deal we signed 10 months ago now on the SPA of the Thames pipeline. We needed a bit more time to get that deal completed. �There have been some administrative complexities. Recommissioning a pipeline... is a new thing. I believe that it is unprecedented off the UK. But there are no material threats to completion.�
�That will give us a low cost, 100%-owned export route into the UK gas market, which, as everyone has seen from the leap in gas prices in the last few days, is absolutely desperate for indigenous gas.�
IOG is looking to develop two 100%-owned gas hubs � Vulcan and Blythe � which consist of five fields with proven and probable reserves of 303 billion cubic feet.
Including the nearby Harvey accumulation, which still needs appraising, Hockey said output could eventually amount to 175 million to 200 million cubic feet per day, enough to meet annual demand for 9 million UK homes.
Hockey said he was pleased after IOG recently started mechanical preparations for the pigging programme at the onshore Bacton terminal, operated by Perenco.
�We are beginning to make progress now with the work that leads to the intelligent pigging of the Thames pipeline which will then allow us to absolutely prove the concept that we can use the Thames pipeline as our export route into the UK market,� he said.
Hockey said the MV Fugro Galaxy vessel is meanwhile surveying the pipeline and the prospective tie-in points for the two hubs.
�We will be ready in early April to hopefully start the offshore part of the pigging,� he said. �We will run a series of spheres and pigs, then it is the final intelligent pig run that gives you the comfort and the detail and understanding about the viability and quality and wall thickness of the line.�
IOG said field development plan approvals remain on schedule for August, in line with milestones agreed with the UK Oil & Gas Authority. First gas is planned in the fourth quarter next year, subject to project financing.
Hockey conceded this was an �aggressive� schedule.
IOG said recently it had s
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