PRODUCERS TO SELL MORE U.K. NORTH SEA GAS

Gas producers have claimed large chunks of emerging competitive U.K. markets with two 15 year supply contracts. Sales volumes during terms of the agreements will total about 1.1 tcf. Beginning in 1994, seven Brae fields gas producers will sell British Gas plc 700 bcf from the U.K. North Sea. Gas will be delivered at St. Fergus, Scotland, via the SAGE gas transportation system. Mobil Gas Marketing (MGM) will supply 400 bcf of gas to fuel a 680,000 kw combined cycle, power station to be built at

Dec. 31, 1990

2 min read

Gas producers have claimed large chunks of emerging competitive U.K. markets with two 15 year supply contracts.

Sales volumes during terms of the agreements will total about 1.1 tcf.

Beginning in 1994, seven Brae fields gas producers will sell British Gas plc 700 bcf from the U.K. North Sea. Gas will be delivered at St. Fergus, Scotland, via the SAGE gas transportation system.

Mobil Gas Marketing (MGM) will supply 400 bcf of gas to fuel a 680,000 kw combined cycle, power station to be built at Rye House, near Hoddesdon in Hertfordshire. Gas comes from several fields.

Companies agreeing to supply British Gas are Brae fields operator Marathon Oil U.K. Ltd., Bow Valley Petroleum (U.K.) Ltd., Kerr-McGee Oil (U.K.) plc, Gas Council (Exploration) Ltd., LL&E (U.K.) Inc., Sovereign Oil & Gas plc, and Norsk Hydro Oil & Gas Ltd.

Gas will be delivered from North, South, Central, and East Brae fields in North Sea Blocks 16/7a, 16/3a, and 16/3b, 155 miles northeast of Aberdeen, Scotland.

According to British Gas, the 15 year contract is the first of its type negotiated with the large, integrated gas company.

Supplies contracted to British Gas are only a portion of Brae region reserves. Further sales contracts are expected, as Brae field producers offer remaining reserves to a variety of potential purchasers.

A gas offtake and balancing agreement allows each Brae group participant to withdraw and sell its share of gas production.

Mobil Corp. formed MGM to compete for direct sales in U.K. gas markets. Except for British Gas, the Mobil unit is the dominant marketer of gas in the U.K.

PowerGen recently received government permission to build the power station in Hertfordshire.