North Sea gas finds boost supplies, but prices will rise
Bruce platform operated by Serica
Extra gas from the North Sea will help secure supplies into the new year and reduce the need for imported fuel – though it won’t stop more price rises, says an industry body.
One energy firm has landed the first gas from its latest development in time for Christmas, and another is due to deliver early in the New Year.
A third has high hopes of delivering more gas in 2022 after seismic surveys suggested significant new reserves.
Global gas prices have hit record highs this year with consumers facing an average £139 price hike this winter and more rises are inevitable in 2022, says industry body OGUK.
However, it says the discovery of new resources beneath the North Sea is good news for the nation’s energy security and the economy.
Gas and oil provide Scotland with 91% of the energy used in heating and this new gas gives it and the rest of the UK extra energy security in what could be a tough winter and in years to come, says OGUK in a paper issued today to stress the continuing significance of the industry in ensuring energy supplies.
It is also published on the day that the Scottish Conservatives have forced a debate in Holyrood on the future of the oil and gas industry following the controversy around the Cambo field.
The UK relies on imports for half its gas needs which mean it has been affected by global shortages – but less so than nations without their own resources.
“It showed how maintaining supplies of gas from our own reserves can buffer the UK against future shortages, reduce the need for imports and protect UK jobs,” says OGUK.
Serica, based in London and Aberdeen, has just landed its first gas from its Columbus development, more than 200km east of Inverness. It already operates the Bruce, Keith and Rhum fields and is partner in a fourth, Erskine, all in the northern North Sea. They collectively supply about 5% of the UK’s gas production.
IOG, operating 20 miles off the Lincolnshire and Norfolk coasts, hopes to send the first gas from its Elgood and Blythe projects into East Anglia’s Bacton terminal very early in the New Year. IOG plans to drill a third well into the Southwark Field in early 2022. It is partnered with CalEnergy Resources, which is a subsidiary of US billionaire Warren Buffett’s giant Berkshire Hathaway fund.
Deltic Energy, another North Sea gas-focused explorer, has high hopes that drilling will add to its gas reserves in 2022 after promising results from recent seismic surveys in the southern North Sea off the coast from Hull, Newcastle and Lincolnshire. London-based Deltic has attracted partners including the Anglo-Dutch major Shell, such is the optimism about the size of the resources.