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First gas from UK’s West Rochelle — Correction

28 Oct 2013 13:39 GMT

Corrects name of operator in paragraphs 1 and 6

London, 28 October (Argus) — Chinese state-controlled CNOOC's subsidiary Nexen started up the first of the two Rochelle gas fields in the UK North Sea on 25 October, around a year behind the initial schedule.

Gas and condensate production has started at the West Rochelle field, and drilling is still underway at the East Rochelle field. Endeavour expects East Rochelle to come on line before the end of this year.

First production was originally scheduled for late 2012, after the UK's Department of Energy and Climate Change (Decc) approved East Rochelle's development plan in early 2011. But the start of operations was postponed several times. Difficulties negotiating access to the Nexen-operated Scott platform — to which the fields are tied back — required Endeavour to turn to Decc for mediation, although the development timeline subsequently slipped again.

The Scott platform is connected to the Sage pipeline system that delivers to the Apache-operated (formerly Mobil) Sage terminal at St Fergus. Production at the field is currently running at about 2.3mn m³/d. Total production from Rochelle is expected to peak at 2.8mn m³/d of gas and around 4000 b/d of condensate once production starts at East Rochelle. The two fields are estimated to hold a total of 4.3bn m³ of recoverable gas, including an unknown quantity of condensate, according to stakeholder Premier Oil. Recoverable reserves were previously estimated to range from 2.7bn-6bn m³, not including condensates, in Endeavour's 2011 environmental impact assessment.

Production is expected to last for four years in the event of low recovery, or eight years in the base or high-recovery scenario, according to the environmental impact assessment. Under the high-recovery scenario, peak production would be sustained for two years, compared with about a year in the other scenarios. The shareholders declined to elaborate on those projections on 25 October.

The gas has been sold in the spot market, but has been hedged, Endeavour said. Premier Oil said the gas has been sold on a sufficiently long-term basis to help cover the investment costs. Nexen operates the Rochelle development with a 41pc stake, US independent Endeavour has a 44pc share, while Premier Oil holds 15pc.

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