North Sea Midstream buys gas assets from Total for $905 million

North Sea Midstream Partners Ltd. (NSMP) has agreed to acquire 67% operated interest in the Shetland Island regional gas export system (SIRGE), 100% interest in the Frigg UK gas pipeline (FUKA), and 100% interest in the St. Fergus gas terminal from Total SA for $905 million.

SIRGE is a 234-km, 30-in. pipeline with 665 MMscfd capacity connecting the Shetland gas plant to the FUKA pipeline. Total’s partners on the line are Dong E&P (UK) Ltd. with 18.3% interest, Chevron North Sea Ltd. 7.2%, and OMV (UK) Ltd. 7.5%.

FUKA is a 362-km, 32-in. pipeline built in 1977 to connect Frigg field on the UK-Norway median line to the St. Fergus gas terminal in Scotland.

Frigg field is now decommissioned, but the FUKA pipeline is still operational, delivering gas from some 20 fields in the northern North Sea to the terminal at St. Fergus, which is a 2.65-bscfd, three-train processing plant.

Following completion of the deal, the systems will be operated on behalf of NSMP by its long-term operating partner px Ltd., which already operates NSMP’s gas processing plant.

“Total remains a major owner of fields feeding into this infrastructure, including the Laggan-Tormore and Martin Linge new developments,” said Andy Heppel, NSMP's chief executive officer. Total last month sold 20% interest in Laggan, Tormore, Edradour, and Glenlivet fields to SSE E&P UK Ltd. for $876 million (OGJ Online, July 29, 2015).

At the time of the deal, Arnaud Breuillac, Total’s exploration and production president, explained that it “is aligned with Total’s portfolio management strategy and target of divesting $5 billion of assets in 2015.”

In 2013, then-newly formed NSMP purchased Teesside Gas Processing Plant Ltd. from a consortium of Deutsche Bank, private US equity investor MatlinPatterson, and Carval, a division of the Cargill Group (OGJ Online, Jan. 22, 2013).

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