The fields lie 12.5 kilometers apart, approximately 80 kilometers north east of St Fergus in the Outer Moray Firth. The Atlantic field lies in license block 14/26a and is operated by BG. The Cromarty field lies in license block 13/30a and is operated by Amerada Hess. The respective operators' estimates of gross recoverable reserves are 118 bcf for Atlantic and 106 bcf for Cromarty.
The total investment including spend to date is expected to be around £205 million. First production is scheduled for late 2005/early 2006, and the anticipated plateau rate is 220 million standard cubic feet per day.
Jon Wormley, BG Executive Vice President and Managing Director, North West Europe, said: "The Atlantic and Cromarty project is in an area of core geographical importance to BG, lying close to the successful Buzzard and Blake fields. We look forward to working with our partner Amerada Hess in delivering this exciting new development. It is a further demonstration of our ability to commercialize discoveries and our commitment to use existing infrastructure to develop fields in the UK Continental Shelf. It is also further evidence of BG's project sanction success. Of the 10 fields sanctioned by the DTI in 2003, BG operated two and was partner in a further two."
Howard Paver, Senior Vice President, Amerada Hess, added, "Field development opportunities on the UK Continental Shelf are becoming increasingly challenging. Here is an excellent example of our unlocking the value of stranded assets through innovation, collaboration and a strong partnership. Atlantic and Cromarty represents a sound investment for Amerada Hess and will make an important contribution to our UK portfolio."
The development will be exploited using sub sea technology with production from the two fields being mixed together offshore and exported to gas and liquid processing facilities at the SAGE terminal, operated by Mobil North Sea Limited (an ExxonMobil subsidiary) at St Fergus. The sub sea facilities will be operated remotely from the SAGE terminal via satellite link to the Goldeneye platform, operated by Shell, and then via a 32km sub sea umbilical to the Atlantic and Cromarty fields.
UK Energy Minister Stephen Timms added: "I am delighted to approve this new project, and congratulate BG and Amerada Hess on its development. We will be a net importer of gas in the not too distant future, but discoveries and projects of this size show how important the North Sea still is for us.
"Atlantic and Cromarty is proof of the remaining opportunities which can be realized on the UKCS through innovation, determination and team work. It will involve the longest direct tie-back to shore for a sub sea development. I welcome the award of the St Fergus Terminal contract to Kellogg Brown and Root, and the opportunity UK based suppliers will have to contribute to its construction."
Delivery of the Atlantic and Cromarty project will be managed by a Joint Development Team comprising staff from both BG and Amerada Hess. The SAGE terminal is managed by ExxonMobil on behalf of the SAGE owners.
Andy Swiger, Chairman and Production Director - ExxonMobil International Ltd said "Attracting third party processing to the SAGE terminal at St Fergus will increase utilization of existing infrastructure while facilitating the development of formerly stranded assets which will contribute to UK gas supplies.'
Work on the Front End Engineering Design (FEED) for the terminal by Kellogg Brown and Root started in mid-August 2003 and was completed in January 2004. The Engineering, Procurement and Construction Management contract for the terminal will also be awarded to Kellogg Brown and Root. This will ensure a smooth transition from the FEED into the detailed design and construction phase.
The pipelay contract has been awarded to Allseas, the subsea controls contract to ABB Offshore Systems, and the contract for the supply of sub sea Christmas trees to Cooper Cameron. Tenders for the sub sea facilities are currently under evaluation, and are expected to be awarded in April 2004.
Drilling of the development wells is planned to begin in March 2005, and is expected to finish in September 2005.
BG holds a 75% stake and is operator of the Atlantic Field and Amerada Hess holds the remaining 25%. Amerada Hess holds a 90% stake and is operator of the Cromarty Field and BG holds the remaining 10%.
The development concept for the Atlantic and Cromarty fields involves two sub sea wells at the Atlantic field, tied back to a manifold in the field, and a single well sub sea completion at Cromarty tied back to the Atlantic manifold by a 12.5 kilometer 12-inch production line. From the manifold, the products are commingled and exported via an 80-kilometer 16-inch wet gas pipeline to the ExxonMobil operated SAGE terminal at St Fergus.
Amerada Hess has a portfolio of 38 producing fields on the UK Continental Shelf and is operator of seven fields. The Company is also a partner in the current major West of Shetland development, Clair. Amerada Hess, headquartered in New York, is a global integrated energy company engaged in the exploration for and the production, purchase, transportation and sale of crude oil and natural gas, as well as the production and sale of refined petroleum products.
BG acquired its 75% interest in the Atlantic field from BP in June 2002, as part of an asset exchange, designed to consolidate BG's asset base. (See BG press release 10929 of 20 May 2002)
BG has one of the most significant exploration and production businesses on the UK Continental Shelf. It operates the Blake field, Armada complex and some of the Easington Catchment Area fields, as well as being a partner in some 10 other producing fields. Of the 10 fields sanctioned by the DTI in 2003, BG operated two (Atlantic and Seymour) and was partner in a further two (Buzzard and Cromarty)
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