Power group Scottish and Southern Energy (SSE) said yesterday it was buying 80% of the North Sea gas and infrastructure assets of global energy firm Hess for about £223million.
SSE said earlier this year it planned to make its first foray into the upstream gas sector, buying assets from Hess to secure future supplies.
Hess partners had pre-emption rights, so the size of SSE’s acquisition had not been confirmed until yesterday.
The Perth-based utility group said it had expected partners of Hess to take some of the 383billion cubic feet of gas and liquid resources that were for sale but the remaining 80% would still provide about 6% of the amount it needed to supply its customers and fuel power stations.
SSE’s new assets include a stake in the BP-operated Central Area Transmission System (Cats), which delivers more than 10% of the UK’s gas demand through a pipeline from the central North Sea to a processing terminal on Teesside.
Alistair Phillips-Davies, SSE’s energy supply director, said: “It was to be expected that some of Hess’s existing partners would exercise their pre-emption rights, but we are very pleased with the assets which we can now go ahead and acquire.
“For a fair price we will secure a new source of primary fuel and a hedge for our gas generation and supply activities, taking a very useful first step into the upstream gas sector.”
Hess is offloading natural gas assets and infrastructure in three regions of the southern UK North Sea: the Everest/Lomond, Easington catchment and Bacton areas.
Unveiling its upstream ambitions in April, SSE said the acquisition of assets from Hess would have no significant job implications.
It added it would probably recruit a few people to help to manage the assets.
SSE – whose businesses include Scottish Hydro Electric – is the second largest supplier of energy in the UK.
It has about 9.35million electricity and gas customers in the UK and Ireland.
Oil prices fell yesterday after US employment data disappointed, dampening optimism over economic recovery for the biggest energy consumer. Crude for July delivery settled down $3.10 at $71.51 a barrel in New York, while Brent crude in London was $3.32 lower at $72.09