Premier Oil to proceed with development of Tolmount Main gas field

22 August 2018 (Last Updated August 22nd, 2018 11:25)

British oil exploration and production firm Premier Oil is set to begin developing the Tolmount Main gas field after the project received approval from joint venture (JV) and infrastructure partners.

British oil exploration and production firm Premier Oil is set to begin developing the Tolmount Main gas field after the project received approval from joint venture (JV) and infrastructure partners.

Situated in the southern part of the North Sea, the gas field is expected to generate a total of approximately 500 billion cubic feet of gas (bcf), with peak production of up to 300 million square cubic feet of gas per day (mmscfd).

Premier Oil's CEO Tony Durrant said: “The sanction of our high-return Tolmount project marks a major milestone for Premier and underpins our medium-term UK production profile.

“Tolmount is one of the largest undeveloped gas discoveries in the Southern North Sea and is similar in size to our Catcher project.

“We have also secured an innovative financing structure for the project, which minimises our capital expenditure (capex) while maintaining our exposure to the upside in the Greater Tolmount area.”

"We have secured an innovative financing structure for the project, which minimises our capital expenditure (capex)."

Premier owns 50% of Tolmount while Dana Petroleum has the remaining stake.

Rosetti Marino has received an engineering, procurement, construction, installation and commissioning (EPCIC) contract for the platform.

The project will include a minimal facilities platform that will export gas to shore through a new gas pipeline. Centrica’s Easington terminal has been chosen as the host facility, while Saipem is selected as the pipeline engineering, procurement, construction and installation (EPCI) contractor.

A rig contract for the four development wells is expected to be awarded soon.

The share of capex needed to develop this large gas field is estimated to be $120m, which includes project management and development drilling costs.

Meanwhile, the infrastructure JV between Humber Gathering System and Dana Petroleum will own and pay for the platform and pipeline, as well as pay for upgrades to the onshore terminal.

In return, Premier will pay a tariff for the transportation and processing of Tolmount gas through the infrastructure.

Construction work is expected to commence later this year with first gas expected in Q4 2020.