The Maersk Oil UK-operated Culzean project, one of the largest gas discoveries of recent years in the UK North Sea, has taken a significant step forward.
Maersk Oil UK and its co-venturers JX Nippon Exploration and Production (UK) Limited and Britoil (BP) have chosen a new standalone facility to develop the discovery: a complex of bridge linked platforms comprising a 12 slot wellhead platform (WHP), a central processing facility and utilities/living quarters. The total investment for the project is expected to be in excess of £3bn (US$4.7bn).
To develop the project further, Maersk Oil UK has informed on behalf of its co-venturers that KBR London has been selected as the successful FEED contractor.
In addition, a significant drilling commitment has been announced, with the selection of a newbuild Heavy Duty Jack Up (HDJU) rig provided by Hercules Offshore, Inc. Ultra High Pressure/ High Temperature (uHP/HT) projects require significant pre-investment and in order to commence drilling in 2016 contracts will be placed now for the rig and later in Q3 2014 for the WHP jacket.
Culzean is a uHP/HT field discovered in 2008 in Block 22/25 of the UK Central North Sea and further appraised between 2009 and 2011. If successfully developed, it could provide around 5% of the UK’s total gas consumption by 2020/21. First gas from the project is currently expected in 2019.
Subject to a final investment decision in 2015, a phased installation of the facilities would begin in 2016.
“We’re pleased to make this announcement today, which means the project is progressing as planned,” said Martin Rune Pedersen, Managing Director, Maersk Oil UK. “Culzean is a key growth project for Maersk Oil, but can also be an important new resource for the UK in terms of its potential to support energy security and employment. We also hope and expect that these new facilities will not only support production of the Culzean discovery, but serve as a hub for a new development cluster in the surrounding region. In this way, the development can play its part in maximising recovery from the UK continental shelf.”
Financial Secretary to the Treasury, Nicky Morgan MP, said, “It’s great news that significant progress is being made in the development of Culzean, with the first contract being awarded to a UK company. This is an early indication that the new ultra high pressure, high temperature allowance announced at Budget will enable substantial investment in the North Sea. Culzean and other projects supported by the new allowance are expected to create and sustain thousands of jobs across the United Kingdom.”