A North Sea gas development that was put on hold last year is back on after operator Total slashed costs to “an acceptable level”.
The French oil and gas giant said yesterday its negotiations with contractors had resulted in favourable new terms, allowing it and Danish partner Dong Energy to relaunch the £340million west of Shetland project.
Total also announced it had acquired a 60% stake in the neighbouring Glenlivet discovery from Dong, which is keeping 20% The other partners in the find are Faroe Petroleum (UK) and First Oil Expro, each holding a 10% interest.
Edradour, 34 miles north-west of Shetland, was one of a string of North Sea projects shelved last year as costs soared.
The natural gas and condensate field – 75% owned by Total, with Dong holding a 25% stake – was forecast to start pumping in 2016.
Yesterday, Total said it now expected Edradour to start up in the fourth quarter of 2017 and reach a plateau of 17,000 barrels of oil equivalent (boe) per day.
The tie backs of Edradour and Glenlivet to Total’s £3billion Laggan-Tormore development west of Shetland are expected to add reserves of more than 65million boe.
Patrice de Vivies, Total senior vice-president, exploration and production, northern Europe, said: “With the upcoming start up of Laggan-Tormore, the sanction of Edradour and the entry into Glenlivet, Total is establishing a new strategic hub in the west of Shetland area.
“The sanction of Edradour also demonstrates our focus on cost discipline.
“The development was put on hold in 2013 due to significant cost increases following the tendering process, but subsequent negotiations with the contractors have reduced the costs to an acceptable level, allowing us to successfully launch the project.”
The development plan for Edradour will see the current discovery well being converted for production through a 10-mile pipeline tied back to the main Laggan-Tormore flowline.
Total and partners are studying the possibility of developing Glenlivet with two wells and a 10.5-mile production pipeline tied back to the Edradour development.
A decision on how best to develop Glenlivet will be made by its partners soon, said Total, which has been active in UK waters since 1962.
More than 90% of Total’s production in the UK comes from several operated fields located in two major zones: Alwyn/Dunbar in the northern North Sea and the Elgin-Franklin area in the Central Graben area.
Current operated developments include the West Franklin Phase II project and Laggan-Tormore, both of which are expected to start up this year and result in Total soon becoming the largest oil and gas producer in the UK.