News – full story
The fields will start producing gas next year
30/07/2015
SSE spends £565m on Total North Sea assets
Will own 20% in fields, Shetland gas plant
Richard Jansen-Parkes
UK ENERGY company SSE is buying a 20% stake in a Total North Sea gas development and a processing plant in the Shetland Islands.
SSE will pay £565m (US$880m) for the stake. It covers Total’s Greater Laggan Area development, which includes the Glenlivet, Laggan, Tormore and Edradour gas fields, as well as the Shetland Gas Plant.
While the fields are not yet producing any gas, they are expected to come online next year. Total estimates that they will have a peak output of around 500m ft3/d, with SSE’s share coming in at 100m ft3/d. It is expected that the production will stay at that level until 2020 before declining over the next ten years.
SSE CEO Alistair Phillips-Davies says that the assets will help the company supply gas to both its customers and its own power stations through to 2030. They will also allow it to diversify its commitment to different energy sectors, preventing it from being over-exposed to a single area.
“We are focussed on maintaining a balanced range of energy businesses, and we have regularly set out our wish to seek new opportunities to increase SSE’s presence in the upstream gas sector where assets can be acquired for a fair price, and that is exactly what this deal represents,” he explains, adding that it is the last deal the company is likely to make for the foreseeable future.
Total will still hold a 60% stake in the development and will operate the fields and the gas plant, with the remaining 20% owned by Dong Energy. The deal is expected to be completed later in the financial year, subject to regulatory approval.
