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Saturday, 12 March 2022

(ENV) IOG - A BRIGHT FUTURE WITHOUT GAZPROM


The Blythe platform

Just over a week after IOG cancelled a contract to sell gas to Russian giant Gazprom, the North Sea operator has found a new buyer.

Supermajor BP (LON: BP) has struck an offtake deal with IOG (LON: IOG) for gas from all of the Saturn Banks Phase 1 fields, Elgood, Southwark and Blythe.

A gas sales agreement (GSA) has also been reached for the Nailsworth and Elland fields, which are part of Phase 2.

The pact is on a “long-term basis”, with break clauses after September 2023. It replaces a GSA that IOG, formerly Independent Oil and Gas, originally signed with BP in 2014 that only covered Blythe.

As North Sea companies sought to cut ties with Russia last week in light of the country’s invasion of Ukraine, IOG announced it had scrapped a deal to sell gas to Gazprom.

Andrew Hockey, the company’s chief executive, described the Russian assault as “shocking” and said “our thoughts are with everyone affected”.

Under this new deal, which contains “improved terms” for IOG, gas will be sold on a day-ahead daily nomination basis at a price linked to the national balancing point (NBP), the UK benchmark.

Mr Hockey said: “It is another very positive step for IOG to have this more comprehensive Gas Sales Agreement in place with a highly credible counterparty in BP Gas Marketing with whom we have enjoyed a long relationship already.

“In parallel, I can confirm that the backgassing and ready for start-up processes have been proceeding this week as planned.” Energy Voice - link - the brilliant Hamish Penman - link - more like this - link

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