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Premier Recasts First Oil for Tolmount, Seeks Acquisition Deal with BP

Premier Oil has announced a delay in expected first gas from its southern North Sea Tolmount project to Q2 2021.

Construction began in December 2019 but entered lockdown in March due to pandemic restrictions. Work resumed earlier this month with appropriate precautions.

The Tolmount project consists of a platform and associated pipeline that will export gas from the Tolmount gas field, owned by Premier Oil and Dana Petroleum, to the Easington onshore gas terminal.

Collectively the system is known as the Humber Gathering System (HGS) and is owned equally by Humber Gathering System Limited (HGSL) and Dana Petroleum.

On 13 May, in a proposed deal with BP, Premier Oil asked to cut the price of two North Sea oilfields and to increase its stake in the project for $191 million.

Premier’s share of the capital expenditure required to develop this large gas field is estimated at $120 million comprising project management and development drilling costs. The company is also talking to shareholders, creditors, and brokers to adjust a plan to extend debt maturities and raise equity.

The infrastructure joint venture will own and pay for the platform and pipeline capital expenditures 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.

After the two-month shutdown, terminal work is progressing, and the pipeline lay is still on track for this summer.

The platform currently under construction in Rosetti Marino’s Ravenna yard. The drilling rig will be mobilized to assist with final commissioning of the platform and to drill the four development wells.

ODE Asset Management will be the installation and pipeline operator for the HGS, with responsibility for operations, maintenance, and integrity support services.

The Tolmount Main gas field was expected to produce around 500 bcf of gas with peak production of up to 300 MMcf/D.

Development was sanctioned in August 2018 by its joint venture and infrastructure partners. It is Premier’s only sanctioned development project.

Premier-operated Tolmount East, in the UK’s Southern Gas Basin, expects a final investment decision by year-end. Once onstream, Tolmount East, and potentially Mongour—which could also be developed as a subsea tieback to the Tolmount infrastructure—will help extend plateau production from the Tolmount area.

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