Oil & Gas

IOG to resume gas sales after production restart at troubled Saturn Banks project

Production has been restarted from IOG’s (AIM: IOG) Blythe and Elgood field, two-thirds of the wider Saturn Banks project.

Gas flows into the into the Saturn Banks Pipeline System (SBPS) resumed as planned this week, the North Sea operator confirmed, after completion of shutdown works.

Sales are now expected to recommence today, following full repressurisation of the line.

IOG will be hoping it draws a line under a troubled period for the project, following a number of shut ins and production issues.

Blythe and Elgood

Blythe production has been constrained by liquids handling capacity at the Bacton terminal and the need for offsite storage, while recoverable resources have also been scaled down.

That adds to a chemical injection fault that forced production offline within weeks of first gas.

Over at Elgood, IOG recently confirmed the decline in flow rate has been “faster than anticipated”, with analysis indicating gas is not flowing across the field to the wellbore as expected.

Southwark finally heading in right direction

Drilling at Southwark, the last part of Saturn Banks, has also been plagued by setbacks, with the field still awaiting first gas.

Final connection, dewatering and backgassing of the SBPS outer section to Southwark has now been successfully completed.

It has brought the pipeline system up to pressure bringing it up to pressure ahead of Southwark first gas.

Additional modifications were also completed in parallel at Saturn Banks Reception Facilities onshore at Bacton terminal to de-risk potential for future shutdowns.

On the drilling side, IOG said “A2 hydraulic stimulation operations” are underway and expected to continue into December.

First gas from A2 is expected around year end, “subject to stimulation progress and operational risks to final hook-up and commissioning”.

The A1 well will be completed after A2 first gas, as previously confirmed by the company.

Rupert Newall, chief executive of IOG, said: “I am very pleased to confirm that Saturn Banks Phase 1 production has been safely restarted after successful completion of shutdown activities. This was one of our top priorities as the new leadership team and the real commitment shown across the team to meet this key objective bodes well for our continuing work to address recent operational challenges.

“In parallel, with hydraulic stimulation underway at the A2 well, we are equally focused on bringing Southwark onstream in a safe and timely manner, the next of a series of key objectives we have set to deliver the value in our portfolio. I look forward to keeping investors informed as these materialise.”

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