Shell moves to expand Shearwater stake

25 April 2019, Week 16, Issue 496

Royal Dutch Shell is in talks to buy BP's stake in the Shearwater field in the UK North Sea.

Reuters reported that talks were under way on a US$250 million deal for BP’s 27.5% stake in the field. Sources told the newswire that an agreement was close after a few weeks of talks, though they also warned the deal was not guaranteed to go through. 

Shell already owns a 28% stake and is the operator of Shearwater, with ExxonMobil holding the remaining 44.5%. 

At peak production, the wet gas export capacity of the Shearwater hub is estimated to be around 400 mmcf (11.3 mcm) per day (4 bcm per year) of gas, which equates to approximately 70,000 boepd. 

News that Shell is looking to build up its stake in the field comes after the company and its partners announced an FID on a project to expand the hub in December 2018. 

Dry gas produced by the Shearwater platform currently flows via the Shearwater Elgin Area Line (SEAL) pipeline to Bacton, on the east coast of England. In this latest investment, the Shearwater platform will be modified and a 23-mile (37-km) pipeline from the Fulmar Gas Line (FGL) to Shearwater installed. The new pipeline will enable wet gas to flow into the Shell Esso Gas and Associated Liquids (SEGAL) pipeline. 

The gas will initially be processed at the St Fergus plant in Scotland prior to onward transmission of NGLs to the Fife Natural Gas Liquids plant (FNGL) and Fife Ethylene Plant (FEP) at Mossmorran, where they will be separated and exported to customers. 

Shell has also been working on the ‘Central Graben strategy’, which ties fields such as Fram and Arran back to the Shearwater platform hub. The company said the strategy would simplify the production process on Shearwater while maximising the value of wet gas that flows into the SEGAL system and on to the FNGL and FEG plants at Mossmorran. 

Shearwater was discovered in 1988 and first developed in 2000. It is located 225 km east of Aberdeen in the central North Sea. 

Edited by

Ryan Stevenson

Managing Editor

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