BRITISH GAS GETS PORTION OF BRAE AREA GAS

Marathon Oil U.K. Ltd. and partners in Brae fields in the U.K. North Sea have signed a contract to sell British Gas plc more than 800 bcf of gas during 15 years starting in October 1994. About 150 MMcfd will move through the SAGE pipeline system to the St. Fergus, Scotland, terminal north of Aberdeen. The contract represents slightly more than one-third of Brae area gas reserves.

Dec. 2, 1991

2 min read

Marathon Oil U.K. Ltd. and partners in Brae fields in the U.K. North Sea have signed a contract to sell British Gas plc more than 800 bcf of gas during 15 years starting in October 1994.

About 150 MMcfd will move through the SAGE pipeline system to the St. Fergus, Scotland, terminal north of Aberdeen. The contract represents slightly more than one-third of Brae area gas reserves.

Marathon said the contract is the first signed between U.K. producers and British Gas under a supply arrangement. Contracts normally have been negotiated under a field depletion arrangement, which dedicates all reserves in a field under a single contract.

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

Marathon said in recognition of the changing gas market in the U.K., contract principles were developed quickly, taking less than 1 year from the decision to commit to a supply contract to the agreement with British Gas.

Talks are under way with potential purchasers for added sales gas from Brae fields.

To allow a quick response to opportunities in the newly competitive U.K. gas market, Marathon and partners have adopted a flexible approach to gas sales. A gas offtake and balancing agreement allows each group participant to sell its share of Brae gas individually if it prefers.

Marathon's Brae group partners are BP Exploration, Bow Valley Petroleum (U.K.) Ltd., Kerr-McGee Oil (U.K.) p[c, British Gas Exploration & Production Ltd., LL&E (U.K.) Inc., Sovereign Oil & Gas plc, and Norsk Hydro Oil & Gas Ltd.