Premier Oil's Tolmount Main development sanctioned by partners

20th Aug 2018 07:45

(Sharecast News) - Premier Oil announced that the development of its Tolmount Main gas field has been sanctioned by the joint venture and infrastructure partners on Monday.The FTSE 250 firm said the gas field, located in the Southern North Sea and operated by it, was expected to produce around 500 Bcf of gas with peak production of up to 300 mmscfd.It said the project would entail a minimal facilities platform exporting gas to shore via a new gas pipeline.The engineering, procurement, construction, installation and commissioning (EPCIC) contract for the platform had been awarded to Rosetti Marino.Centrica's Easington terminal was selected as the host facility, and Saipem as the pipeline EPCI contractor.Selection of the rig contractor for the four development wells was expected "imminently".Premier said its share of the capital expenditure required to develop the large gas field was estimated at $120m, comprising project management and development drilling costs.The infrastructure joint venture between Humber Gathering System - a member of the CATS Management group of companies - and Dana Petroleum would own and pay for the platform and pipeline capex, as well as pay for upgrades to the onshore terminal.In return, Premier said i would pay a tariff for the transportation and processing of Tolmount gas through the infrastructure.The Tolmount Main project now moved into the execution phase, the board explained, with construction works scheduled to start later in the year and first gas targeted for the fourth quarter of 2020.Premier said the partners in the Tolmount gas field were itself as the operator at 50%, and Dana Petroleum at 50%."The sanction of our high return Tolmount project marks a major milestone for Premier and underpins our medium term UK production profile," said Premier Oil chief executive officer Tony Durrant."Tolmount is one of the largest undeveloped gas discoveries in the Southern North Sea and is, in barrel of oil equivalent terms, similar in size to our Catcher project."We have also secured an innovative financing structure for the project which minimises our capital expenditure whilst maintaining our exposure to the upside in the Greater Tolmount Area."