IOG frustrated as severe weather hampers UK gas project start-up

UK company IOG plc is experiencing a further delay in the start-up of its Saturn Banks Project – Phase 1, located in the UK sector of the North Sea, due to stormy weather conditions, which are hindering the execution of final works required to be checked off the list before the project can be brought online.

The IOG-operated Saturn Banks Project – Phase 1 – sanctioned in October 2019 – consists of Blythe, Elgood, and Southwark fields in the UK Southern North Sea. IOG holds 50 per cent and its partner CalEnergy Resources holds the other 50 per cent interest in this project.

In its latest update on the project, IOG informed on Monday that Saturn Banks Reception Facilities (SBRF) preparation for the first gas was now 99 per cent complete. The company’s senior management attended a final Pre-Start Up Safety Review ahead of final Saturn Banks commissioning and inspected the facilities on Thursday, 17 February, as part of pre-completion assurance.

Andrew Hockey, CEO of IOG, explained: “Terminal operator Perenco, executing works on IOG’s behalf, advised us that the current stormy weather has hampered the final construction and leak testing programme with a knock-on impact on the commissioning of the safety instrumentation systems.”  

The firm further adds that final pre-commissioning checks and cause-and-effect function testing and final construction activities continue to be undertaken, albeit severe weather from storms passing over the UK  has been hindering progress with further stormy weather likely to impact crane lifting operations.

The firm elaborates that, once the terminal operator Perenco UK, IOG, and its pipeline duty holder ODE Asset Management (ODEAM) have fully signed off the onshore facilities to safely introduce hydrocarbons, then backgassing operations can start. According to the update, this is now targeted for the week beginning on 28 February, while the first gas is expected approximately a week later.

“As a result, the plant will likely not be ready to start backgassing until the week beginning 28 February, with first gas from both Blythe and Elgood around a week later. Albeit frustrating, this delay facilitates a safe and reliable start-up,” confirmed Hockey.

Previously, the full readiness for the beginning of back-gassing of the offshore pipeline system was targeted for mid-February with the first gas from both Blythe and Elgood expected approximately a week thereafter. Furthermore, IOG believes the unsettled weather may also potentially impede the operations required at the Blythe platform as part of the backgassing and start-up procedures, although, the company’s statement clarifies that the bulk of this work is now complete.

Moreover, as a result of a planned inspection, the UK Health and Safety Executive has raised a number of clarifications required to be resolved ahead of the start-up and IOG claims that this is being addressed. As previously reported, the anticipated gross outturn total Phase 1 capital expenditure was increased up to 20-25 per cent over the FDP budget due to unplanned interruptions to the drilling campaign, additional requirements for offshore pre-operating activities, and the need for an expanded scope of subsea and pipeline installations over recent months.

IOG’s Saturn Banks Project targets a gross peak production rate of 140 mmscf/d (24,000 Boe/d) from gross 2P gas reserves of 302 Bcfe and management estimated 2C gas contingent resources of 132 Bcfe, via an efficient hub strategy based on co-owned infrastructure.

Meanwhile, IOG has continued to progress with suitable options for the return to Southwark drilling, after unstable conditions due to seabed scouring forced it to suspend operations in January 2022. As a reminder, after several delays, drilling operations started at the Southwark field in late December, resulting in the spudding of the first development well on 30 December 2021.

However, about 10 days into January, IOG reported further problems with drilling operations due to challenges with seabed conditions, which threatened to compromise the stability of the Noble Corporation-owned Noble Hans Deul jack-up rig.

The company’s latest statement sheds some light on the latest developments related to the resumption of drilling operations, as the firm explained that during February the forward plan was defined with the assistance of subject matter experts and agreed with the rig owner. IOG adds that this essentially entails creating pads on the seabed with suitable sized rocks to enable stable positioning of the rig spud cans.

The company further says that this solution is now being expedited with drilling expected to be resumed at Southwark in March subject to the completion of the necessary regulatory approvals and commercial processes.