Independent Oil & Gas (IOG) started up its Saturn Banks project and delivered first gas to the southeast UK, it said March 14. This milestone came less than 30 months after the final investment decision.
CEO Andrew Hockey said the Blythe well (rig pictured below, courtesy IOG) was safely opened up: “IOG gas has started to be delivered into Bacton and on into the UK market. The Elgood well is expected to follow in the next two days.”
IOG is partnered with CalEnergy Resources, which is backed by Warren Buffett’s Berkshire Hathaway Energy fund.
Phase 1 will allow financing further stages. “By delivering domestic gas supplies through our co-owned infrastructure on a Scope 1 and 2 Net Zero basis we can generate strong and sustainable returns for shareholders,” he said.
IOG and BP Gas Marketing have also revised their gas sales agreement (GSA). Gas will be sold on a day-ahead daily nomination basis at a price linked to the National Balancing Point (NBP, the UK traded gas benchmark). The GSA incorporates the potential, subject to credit approval, for physical gas hedging up to 50% of forecast production over various periods, in line with the Company’s hedging strategy.
IOG chair Fiona MacAulay said she was “hugely proud of everyone in our team for overcoming the many challenges to deliver this historic milestone….constructive collaboration had turned IOG from an unfunded start-up to a gas producer expected to generate significant cashflow this year and into the future.
She 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.” For more information, please see here.