abce certificate
New Articles
Wednesday, 07 January, 2009, 21:40 GMT | more >>

BG feels sting of CATS scratch



By Upstream staff 

UK player BG Group is losing production of 80,000 barrels of oil equivalent per day, mainly gas, due to the closure for repairs of the Central Area Transmission System (CATS) North Sea gas pipeline, chief financial officer Ashley Almanza said today.

Damage to the CATS pipeline, which shut on 1 July after being damaged by a ship's anchor, could have a significant impact on BG's UK production in the third quarter, the company said in its second quarter results.

Around half BG's UK gas production flows through the pipeline and about 13 million cubic metres of gas per day are shut in because of the closure.

Nonetheless, BG boss Frank Chapman said it was sticking to its target of between 5% to 7% average annual production growth over the period 2006-2009.

"We are very comfortable that we are on track to meet our long-term targets," Reuters quoted him as telling a conference call with reporters.

BG has a 51% interest in the 404 kilometre CATS pipeline, which supplies up to 20% of the UK's gas through a terminal at Teesside in north-east England from a cluster of fields in the North Sea, including Everest, Lomond, Armada, Banff, Erskine, ETAP, Jade, Joanne, Judy, and Seymour.

Other field operators have been unable to get their gas to market in the UK because of the pipe shutdown.

Some say their oil output has also been affected by the repair work because they cannot extract oil if the associated gas has nowhere to go.

A spokeswoman for pipeline operator BP said late last night it was still unclear how badly damaged CATS is and how long it will take to fix.

"Divers are still looking at the pipeline so it looks like it will be into next week before we have any further information," she told Reuters in an email.

BP said at its own result presentation earlier this week that repairs could take several weeks.


Friday, 27 July, 2007, 09:58 GMT  | last updated: Friday, 27 July, 2007, 09:58 GMT

e-mail this article to a colleague


to email:  from:
comments: