(CAM) IOG'S GAS FLOWS INTO UK

IOG has produced its “first gas” last weekend from its Blythe well off the coast of East Anglia.

The independent energy company revealed gas from the well started flowing into its UK grid on Sunday, while Elgood – a second gas grid – is also due to start producing within days.

The gas will flow into Bacton, on the Norfolk coast, and meet demand in the southeast and then the rest of the UK.

Both grids are part of its Saturn Banks project, which has been set up to create a new production hub in the Southern North Sea.

Development of another field, Nailsworth, is expected to begin this year, and would produce gas towards the end of 2023.

IOG chair Fiona MacAulay said: “With heightened energy security risks across Europe and the continued urgency of the energy transition, there has never been a more important time to bring new UK gas resources onstream. This is especially true of IOG’s gas which has far lower carbon intensity than imports.”

The finding of the new field was also welcomed by Offshore Energies UK (OEUK), which represents the UK offshore industry.

It argued the new field demonstrated the vital role of the UK Continental Shelf in supporting the nation’s energy security during the current global energy crisis.

Jenny Stanning, external relations manager at OEUK, said: “This new source of gas, from the UK’s own waters, boosts our energy security at time when the Ukraine crisis has reminded us of the urgency and importance of maintaining our own energy supplies.” City A.M. - link - Nicholas Earl - link - more like this - link

(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