Total Sets Sights on Sept Green Light for West of Shetland Gas Devt

North Sea Areas
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LONDON (Dow Jones Newswires), Feb. 13, 2009

Total SA plans to move forward with development of the Laggan and Tormore gas fields in the West Of Shetland area of the UK North Sea and expects to give the go-ahead for the investment in September, said Roland Festor, managing director of the company's UK exploration and production arm.

The company aims to get first gas produced from the fields in 2013, he said.

Total will develop the two fields using subsea facilities, construct a plant to process the gas near the Sullom Voe oil terminal on the Shetland Islands and build a new pipeline connecting to the existing Frigg pipeline to export the gas to the mainland, he said. This development plan is subject to approval by the UK government, which he hopes will be received by September, Festor said.

Total will build extra capacity into the pipeline and gas processing facilities to allow for future development of other fields in the West of Shetland area. The license holders of the undeveloped Rosebank-Lochnagar fields - Chevron Corp, StatoilHydro and OMV AG -- and of the Clair field -- BP PLC, ConocoPhillips, Chevron, Royal Dutch Shell PLC and Hess Corp. -- are interested in investing in the infrastructure, he said.

The tender process for the pipeline, treatment plant and subsea systems have already started, he said.

West of Shetland is one of the last great undeveloped resource areas of the mature North Sea, which the UK government says could contain up to 4 billion barrels equivalent of oil and gas, 17% of remaining UK reserves.

However the area is far from existing oil and gas infrastructure and fields are located in deep, stormy seas, so development will be challenging. The government estimated in September 2007 that development of all resources in the area could cost GBP4 billion.

Costs have risen substantially still then, but Festor said there are already signs that costs are falling due to the dramatic slump in the price of oil in the last six months.  

Copyright (c) 2009 Dow Jones & Company, Inc.

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