By Kjetil Malkenes Hovland
Danish oil company Maersk Oil said Thursday it had chosen KBR
London to engineer the technically challenging Culzean gas field in
the U.K. North Sea, a $4.7 billion investment set to produce 5% of
the country's gas output from 2020 or 2021.
First gas was expected in 2019 from the high-pressure,
high-temperature field, discovered in 2008 in the central part of
the U.K. North Sea, said Maersk Oil, the oil and gas unit of Danish
conglomerate A.P. Moller-Maersk A/S (MAERSK-B.KO).
"Culzean is a key growth project for Maersk Oil, but can also be
an important new resource for the U.K. in terms of its potential to
support energy security and employment," said Martin Rune Pedersen,
managing director of Maersk Oil U.K.
The field was set to produce between 400 million and 500 million
cubic meters of gas a day in the plateau phase, and Maersk said its
share was equal to 30,000 to 45,000 barrels of oil equivalent per
day.
High-pressure, high-temperature gas reservoirs are complicated,
and require significant pre-investment, according to Maersk Oil.
The pressure in the Culzean field is three times that of an
ordinary reservoir, and the temperature is 70% hotter than normal
at around 170 degrees Celsius.
The field will be developed with a complex of bridge-linked
platforms, including a wellhead platform, a processing platform and
a living quarters and utilities platform, Maersk Oil said.
The field's profitability was boosted by a U.K. government tax
break for high-pressure, high-temperature fields.
"This is an early indication that the new ultra high pressure,
high temperature allowance announced at budget will enable
substantial investment in the North Sea," said Nicky Morgan,
Financial Secretary to the U.K. Treasury.
The final investment decision is set for 2015 and installation
is to commence the year after, Maersk Oil said.
Culzean is operated by Maersk Oil, which owns 49.99%. JX Nippon
owns 34.01% and BP Plc (BP) owns 16%.
Write to Kjetil Malkenes Hovland at
kjetilmalkenes.hovland@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires