Independent Oil and Gas (IOG) expects to sign a sale and purchase agreement for the UK Southern North Sea pipeline by the end of March.
The company said on Tuesday that “substantial progress” was made on the agreement and it’s now expected that all the pipeline owners should be in a position to sign on or before March 31, 2017.
To remind, the company signed a memorandum of understanding for the 100 percent acquisition of a currently disused pipeline in the Southern North Sea on January 16.
As part of the deal, IOG would assume operatorship of the pipeline at completion and the liability for future decommissioning as well as acquire related onshore facilities.
The company then intends to re-commission it to enable evacuation of the gas from both the Blythe hub and Vulcan Satellites hub. Also, with 300,000 million cubic feet per day capacity, the pipeline could accommodate export of resources from the Harvey discovery.
IOG believes that there may be potential for third parties to use the pipeline in which case the company would benefit from tariff income.
In Wednesday’s update, the company added that the expiry date of the memorandum of understanding was extended until the end of March.
The company added that the pipeline was currently disused and would be acquired for a nominal consideration. IOG intends to use the pipeline as a direct export route for the company’s gas from Southern North Sea assets into the UK market.
In related news, the company also announced on Wednesday that its chairman, David Peattie, would be stepping down from his position after being named as the CEO of the Nuclear Decommissioning Authority (NDA).