U.K. CONTINENTAL SHELF DUE 800 MILES OF PIPELINE IN 1993

Aug. 17, 1992
More than 800 miles of pipeline will come into service on the U.K. continental shelf during 1993, surpassing by 75% the previous record set in 1977. About 3,500 miles of pipeline is in place, Commissioning of the Miller natural gas pipeline and Scottish Area Gas Evacuation (SAGE) network this year and start-up of the Central Area Transmission System (CATS) next year will bring more than 600 miles of pipeline into use during 1993. The projects are part of a recent development boom in the

More than 800 miles of pipeline will come into service on the U.K. continental shelf during 1993, surpassing by 75% the previous record set in 1977. About 3,500 miles of pipeline is in place,

Commissioning of the Miller natural gas pipeline and Scottish Area Gas Evacuation (SAGE) network this year and start-up of the Central Area Transmission System (CATS) next year will bring more than 600 miles of pipeline into use during 1993. The projects are part of a recent development boom in the central North Sea.

In a review of U.K. offshore pipelines, analyst County Natwest Woodmac reported that projects totaling about 1,250 miles of pipeline have been sanctioned but are not yet operating. Two thirds of this total is gas pipeline, while 60% is made up of main lines from shore to platform.

County Natwest says that in most cases spur lines will be used to connect new fields with existing infrastructure. The analyst sees 57 development projects likely to proceed in the next 2-3 years.

Of those 57 fields, 29 could be developed by subsea tie-back to existing platforms or by directional drilling from a central platform. Of the remainder, 23 would most likely be developed with spur lines to existing infrastructure.

On the assumption that no new major liquids or gas lines will be needed to the U.K. or to continental Europe, some 960 miles of pipelines have been identified for probable projects. Of that mileage, 43% will be oil pipeline, 51% gas, and 6% oil and gas.

The economics of the Britannia, Elgin, and Franklin field developments will be the main deciding factors regarding major infrastructure additions. Whatever happens with them, however, it is clear that ownership and availability of infrastructure are increasingly crucial issues in the development of North Sea reserves.

TIE-BACK TARIFFS

Ninian field, operated by Chevron Petroleum Co. Ltd. in the central North Sea, shows how the prospect of third party tariffs can extend a field's commercial life.

Ninian production started in 1978, peaked at 300,000 b/d in 1982, and is declining now.

But Ninian Central is the hub of the Ninian pipeline system, collecting output from the Ninian North and South, Heather, Magnus, and Alwyn North platforms for transport to shore at Sullom Voe.

A 36 in. pipeline runs from Ninian Central to Sullom Voe. It has peak capacity of 850,000 b/d. The platform is also tied into the Flags gas system through an 11 mile, 10 in. feeder line.

When Ninian stopped exporting gas in 1987, Chevron sought third party production deals, the consequence of which has been to improve field economics dramatically.

Earlier this year, Lasmo North Sea plc's small Staffa oil and gas field came on stream 6 miles from Ninian. It's a subsea development tied back to Ninian Southern.

Two wells will produce 8,000 b/d during the first 6 months on stream. Flow will decline gradually during the next 7 years. Oil is commingled with Ninian production and transported to Sullom Voe. Staffa's gas is sold to the Ninian partners for fueling the platform.

The Ninian partners receive a tariff of 2.50-3/bbl ($4-5.76/bbl) for Staffa throughput. Tariff income will rise later this year, when Conoco Ltd. brings subsea Lyell field on stream, and in 1993 when Texaco North Sea U.K. Ltd.'s subsea Strathspey field begins production. The Lyell and Strathspey tariffs are likely to be in the same range as Staffa's.

Lyell is a small oil and gas field west of Ninian, which will be tied back to Ninian Southern. Strathspey is an oil and gas/condensate field to the east, which will be produced through Ninian Central. Lyell will reach peak production of 18,000 b/d in 1993. Reserves are estimated at 400 million bbl. Strathspey's peak output will be 39,000 b/d of oil in 1993-95, together with 4,000 b/d of natural gas liquids.

Lasmo's Columbia field is also likely to be developed through the Ninian complex by subsea tie-in. Located southwest of Ninian, the field is scheduled for development application to the U.K. Ministry of Trade and Industry in October, with first production planned for 1994.

CONTINENTAL LINK

The U.K. government hopes to set up gas exports to continental Europe when the single European market becomes a reality next year. More pipeline construction activity could result. No firm plans have been made, but a study group has been established to determine feasibility of the project.

Six companies are involved: British Gas plc, British Petroleum Co. plc, Conoco, Elf (U.K.) Ltd., Norsk Hydro AS, and Den norske stats oljeselskap AS. A report is expected later this year.

The problem with the pipeline scheme is likely to be funding. Without gas sales contracts in place, the oil and gas companies would be unwilling to put money into the venture.

A similar gas gathering scheme proposed 12 years ago foundered on problems about the availability of developed gas reserves, total throughput of the system, and doubts about sales contract timings-as well as funding.

Copyright 1992 Oil & Gas Journal. All Rights Reserved.