UK's Angus Inks MoU for Underground Gas Storage with Trafigura

Angus Energy plc has entered into a memorandum of understanding (MoU) with a subsidiary of Trafigura Group Pte Ltd. for underground gas storage at its Saltfleetby gas field in Lincolnshire, England.

The Saltfleetby field is volumetrically the largest onshore gas field in the United Kingdom (UK) and its largest potential subsurface porous rock storage reservoir.

Trafigura and Angus aim to “leverage their complementary capabilities and collaborate on an underground gas storage facility in the UK, for natural gas, CO2, or hydrogen”, Angus said in a recent announcement on the London Stock Exchange.

The MoU sets out the terms and a model for cooperation for the two companies, under which they plan to review the technical and commercial feasibility of storage at Saltfleetby, as well as agree on commercial terms and schedules for a future storage project. Under the MoU, Trafigura will act as the initial customer or offtaker of a proportion of the stored product, subject to quality specifications, according to the announcement.

Within 12 months, Trafigura and Angus will set the specific milestones required to establish a gas storage facility at Saltfleetby, subject to technical and commercial feasibility, Angus said.

"This project builds on the strategic relationship Angus has established with Trafigura with its new loan facility and gas sales from the Saltfleeby Field,” Angus CEO Richard Herbert said. “The gas storage project has the potential to facilitate the United Kingdom's transition from carbon heavy fuels to energy sources with a lower environmental impact, while making attractive commercial returns for shareholders”.

Angus in November 2023 commissioned a permanent flowline from the BO7T well at the Saltfleetby gas field with minimal production loss.

"Since the BO7T well came on stream in May, it has been operating in a temporary separator and flowline configuration, which has added complexity and costs to the operations at the field. The period of well clean up was much longer than we had expected, due to incomplete acidization of the mud additives used to control the wellbore during the drilling of the reservoir section”, Herbert said in a separate statement.

“Now that fines production has reduced and with the completion of the engineering works to install the permanent flowline, we are seeing stable well performance and will have a significant reduction in operating costs with the removal of expensive rented equipment and personnel required for the temporary flowline", he added.

Angus Operations Director Tim Kaye said, "This is another key company milestone delivered safely and with no harm to the environment and we can all take pride in another site goal achieved with the material benefit of reducing costs at site and further improving the long-term sustainability of the Saltfleetby field".

According to the company’s production and operations update for the fourth quarter of 2023, the Saltfleetby field produced and sold aggregate gas volumes of 7.35 million therms, or 705.9 million cubic feet, for the quarter, compared to 7.9 million therms, or 762.5 million cubic feet, in the previous quarter. Gas condensate production averaged 130 barrels per day.

The Saltfleetby Gas Field is located onshore UK in license PEDL005, producing gas from East Lincolnshire. The field was discovered in 1996, producing gas from both the Westphalian Sandstones and Namurian reservoirs. Production began in 1999 at rates exceeding 50 million standard cubic feet per day, according to the company’s website.

London-based Angus Energy describes itself as an independent onshore oil and gas development company focused on advancing its portfolio of licensed UK assets.

To contact the author, email rocky.teodoro@rigzone.com