Independent Oil and Gas (IOG) has signed an agreement to acquire the recently decommissioned Thames Gas Pipeline located in the southern North Sea from Perenco UK, Tullow Oil and Centrica Resources.
The pipeline asset will provide the proposed export route for IOG’s southern North Sea assets.
IOG CEO and interim president Mark Routh said: "I am delighted to have signed the sale and purchase agreement for this strategically important acquisition. We acquired most of our SNS gas portfolio at low cost because the assets in this area were considered stranded without a viable export route.
"This acquisition allays those concerns and is therefore of great importance to IOG as we now have a route to market for our gas.
"Subject to completion and remediation, it will enable us to deliver up to half a trillion cubic feet of gas resources to the UK market over a period of 15-20 years from the end of next year.
"We are also open to work with third-parties who may wish to use our export facilities for a tariff.
"We believe this is the kind of innovation required to breathe new life into the southern North Sea and is entirely in line with the principles of maximising economic recovery, as championed by the UK Oil and Gas Authority."
After completion of this transaction, IOG will conduct an intelligent pigging inspection to evaluate the safety of the pipeline for re-use.
The pipeline will enable the company to export gas from IOG’s Blythe and Vulcan Satellite hubs.
These two hubs require an estimated maximum throughput of approximately 150 million cubic feet a day, which is within the pipeline’s anticipated capacity.
The company expects the pipeline to have sufficient capacity to accommodate the export of gas from the Harvey discovery, subject to its successful appraisal.
In addition, the company has planned to purchase the onshore reception facilities at the Perenco Bacton terminal. It has signed a period of exclusivity until the end of September next year.
Within the time, IOG will be using and upgrading the facilities during the intelligent pigging works, subject to a construction and tie-in agreement (CTIA), which is currently being formulated.