SSE E&P UK buys interest in West of Shetland fields for $876 million

SSE E&P UK Ltd. has agreed to acquire 20% interest in Laggan, Tormore, Edradour, and Glenlivet fields in the West of Shetland area from Total SA for $876 million.

Laggan and Tormore fields lie in 600 m of water 140 km west of the Shetland Islands on Blocks 206/1a, 205/4b, and 205/5a. Development of the fields was launched in 2010 and launch of gas production is expected in the coming months (OGJ Online, Feb. 16, 2010). The development concept consists of the 140-km tie-back of five subsea wells to the new onshore Shetland gas plant, with peak production of 500 MMscfd.

Development of Edradour and Glenlivet fields launched in 2014. The Edradour discovery lies in 300 m of water 75 km northwest of Shetland on Block 206/4a, while the Glenlivet discovery lies in 400 m of water north of Edradour on Block 214/30a.

Edradour will be developed by converting the discovery well into a production well, connected to the main Laggan-Tormore flowline by a 16-km subsea tie-back (OGJ Online, July 3, 2014). Glenlivet will be developed via two wells and a 17-km production pipeline tied back to Edradour (OGJ Online, Oct. 30, 2014). Edradour is expected to start up in 2017, followed by Glenlivet in 2018.

“The sale of these minority interests is aligned with Total’s portfolio management strategy and target of divesting $5 billion of assets in 2015,” explained Arnaud Breuillac, Total’s exploration and production president. “It allows us to capitalize fully on this new deep offshore development, while retaining a majority interest and operatorship.”

Following completion of the deal, Total will have 60% operated interest in Laggan, Tormore, Edradour, and Glenlivet fields alongside partners Dong E&P (UK) Ltd. 20% and SSE E&P UK 20%. The sale also includes 20% of Total’s interest in the Shetland gas plant and interests in several exploration licenses in the West of Shetland area, including the Tobermory discovery.

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