Shell gets regulatory approval for UK North Sea gas project

Following last year’s rejection, oil major Shell has now received regulatory approvals for the development of the Jackdaw field located in the UK North Sea.

Shell submitted its Environmental Statement for Jackdaw field development to the UK authorities and issued the Environmental Statement (ES) for public consultation in May 2021. This ES was an update to the original statement for the Jackdaw project submitted in January 2020. However, the UK authorities in October 2021 rejected the plan.

The decision to reject was based on the grounds that “the project will have a significant effect on the environment, resulting from atmospheric emissions, that cannot be avoided, prevented, reduced or offset by attaching conditions to the agreement to the grant of consent.”

Come March 2022 and Shell filed an amended ES for the Jackdaw field development to the authorities. The UK’s regulator North Sea Transition Authority (NSTA) is responsible for deciding whether or not to grant consent for the project, but an agreement to the grant of consent must be obtained from the Secretary of State for Business, Energy and Industrial Strategy prior to consent being granted. The Secretary of State’s decision on whether or not to agree to the grant of consent is based on the environmental impact assessment for the project.

The Offshore Petroleum Regulator for Environment and Decommissioning (OPRED) has now completed its review of the ES, the representations received relating to the environmental effects of the project, and the further information provided. As a result, the Secretary of State agreed to the grant of consent to Shell for the project.

However, the Secretary of State has several conditions to the agreement to the grant of consent. Namely, the export gas specification must be managed over the field life via operation of the amine unit to minimise as far as reasonably possible the mass of CO2 vented offshore and the CO2 extracted from the produced gas must be routed to a dedicated vented emission point to minimise as far as reasonably possible emissions from the flare.

Furthermore, a meter must be fitted to the new amine unit vented emission point and that meter must meet a standard that is consistent with recognised UK industry standards and is designed, installed, operated and maintained to ensure a consistent level of uncertainty in all operational scenarios.

Finally, the wells relating to other fields planned to be produced via the Shearwater installation during the Jackdaw period of production must be phased so as to minimise as far as reasonably possible the cumulative mass of CO2 vented from Shearwater over the Jackdaw field life.

The approval comes at a time when the issue of energy security is at the top of the government’s agenda following Russia’s invasion of Ukraine. Therefore, Kwasi Kwarteng, Secretary of State for Business, Energy and Industrial Strategy of the United Kingdom, said: “Let’s source more of the gas we need from British waters to protect energy security.”

However, environmental groups disagree and are already organising to force the government to stop the Jackdaw field development together with the Cambo project, which has recently received a two-year licence extension. As a reminder, the Cambo is operated by Siccar Point, which is being taken over by Ithaca Energy, in partnership with Shell.

In addition to Cambo, another oil project, the Equinor-operated Rosebank, has received a licence extension from the UK authorities, paving the way for the final investment decision. The potentially recoverable volumes at Rosebank are expected to be more than 300 million barrels.

The Jackdaw field is an ultra-high pressure / high temperature (uHP/HT) gas condensate field. The proposed project involves developing the field via a new wellhead platform (WHP). The proposed project will be located in the Central North Sea, approximately 250 km east of Aberdeen and 30 km southeast of the Shearwater platform and adjacent to the UK/Norwegian median line. The water depth in the Jackdaw area is approximately 78 meters.

The proposal is to develop the field which will consist of four production wells drilled at the Jackdaw WHP using a heavy-duty jack-up rig. Jackdaw fluids will be commingled at the WHP and exported to the Shearwater platform via a new 31 km 12” nominal bore pipeline to the existing Shearwater platform, where the fluids will be processed with gas exported via the Fulmar Gas Line and condensate exported via the Forties Pipeline System.

The WHP will be operated as a not permanently attended installation with control, monitoring, and shutdown and operational support provided by the Shearwater host.

Shell has also recently sanctioned the development of the Crux natural gas field, off the coast of Western Australia. The project will provide further supplies of natural gas to the existing Prelude floating liquefied natural gas (FLNG) vessel, which was restarted in April 2022 following a four-month hiatus. Construction will start in 2022 and the first gas is expected in 2027.