UK CATS Gas Pipe Repairs Done, Restart This Week

LONDON Aug 30, 2007 (Dow Jones Newswires)

Divers have completed repair work on BP PLC's (BP) Central Area Transmission System, or CATS, pipeline ahead of schedule and a controlled restart will begin this later week, the company said in a statement Thursday.

BP has already begun to re-pressurize CATS with gas from North Sea fields and normal throughput levels are expected around the middle of September, the statement said.

Divers installed a metal sleeve to strengthen an area of pipeline damaged by a ship dragging its anchor while leaving the port of Teesside on June 27.

The pipeline shutdown has been affecting a significant proportion of the U.K. North Sea's oil and gas output. All gas production has been shut in at the fields connected to the pipeline - Andrew, Everest and Lomond operated by BP; the Eastern Trough Area Project, or ETAP, operated by BP and Royal Dutch Shell PLC (RDSB.LN); Jade and J-Block operated by ConocoPhillips Corp. (COP); and Armada operated by BG Group PLC (BRG).

These fields produced around 30 million cubic meters of gas a day in March, according to data from the U.K. Department of Business, Enterprise and Regulatory Reform.

"We have been told that the CATS system will return to normal throughput mid-September, so this is when we would expect full production to resume" said BG Group spokeswoman Petrina Fahey. BG Group said in June that 80,000 barrels of oil equivalent a day had been shut in at Armada.

A ConocoPhillips spokeswoman said: "J-Block is ready to start (oil and gas) production. We anticipate recommencing export levels through CATS Friday." She declined to provide production figures for the fields.

A BP spokesman declined to comment on the pipeline's total throughput. He also said that some operators were still performing annual maintenance shutdowns in the region.

A London-based gas trader at a European utility said gas was already flowing into the U.K. network from the Teesside PX terminal at a rate of around 6 million cubic meters a day. He expected gas flows from BP's own Teesside gas terminal to ramp up more slowly over the coming weeks.

Oil production at most of the fields which feed gas into CATS was also affected. Analysts estimated up to 100,000 barrels of oil production a day may have been halted. Oil from the fields affected feeds into Forties crude.

Angela Henshall and Lananh Nguyen in London contributed to this report.

Copyright (c) 2007 Dow Jones & Company, Inc.

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