Eni signed a Memorandum of Understanding last night with Tullow Oil Limited for the acquisition of Tullow's 52% interest in the Hewett Unit fields in the UK North Sea and related infrastructure, including the associated Bacton sub-terminal, for a cash consideration of £ 210 m. Eni is an existing partner in the Hewett Unit and the acquisition of Tullow's stake will raise Eni's total interest in the Unit to 89%, becoming operator of the Unit. The acquisition of a majority interest in the Hewett Unit is an important step forward in Eni's strategy to develop gas storage facilities in the UK and in Europe.
The UK is a net importer of gas and Eni believes that the gap between demand and supply, and therefore price volatility, will further increase during the coming years due to the continued decline in domestic gas production.
Moreover, the level of available storage capacity in the UK is significantly lower than the European average when compared to demand. Eni believes that, given the characteristics and location of the Hewett Unit reservoirs and related Bacton gas terminal, strategically located in the main access point to the UK market in close proximity to the Interconnector pipeline connecting UK with Europe, the Hewett Unit represents a highly attractive opportunity for the development of an offshore gas storage facility for seasonal modulation. It is Eni's intention to apply for a storage license in the near future with the aim of converting certain depleted gas fields in the Unit into offshore gas storage facilities. The storage facility is expected to be the biggest in UK and one of the biggest in Europe, with a Working Gas capacity up to around 5 billion cubic meters.
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