Maersk Oil UK’s demanding Culzean £3 billion ($4.7 billion) ultra-high-pressure, high-temperature (UHP-HT) project has shifted up a gear with the Danish operator selecting KBR to carry out front-end engineering and design for a major three-platform bridge-linked development.
The new complex will comprise a 12-slot wellhead platform, a central processing facility and a utilities and accommodation facility for more than 100 people, Maersk said on Thursday.
“These are very significant announcements not only in terms of the progress of the project but also in terms of the commitments the partners have made,” Martin Rune Pedersen, managing director of Maersk Oil UK, told Upstream. “It really shows it is a tangible project and it is progressing well.”
The project has now moved from the “select” phase into “define” and, if all goes to plan, a final investment decision is expected in 2015.
This will be followed by a phased installation of the facilities from 2016. First gas is currently expected in 2019 leading to plateau production of between 400 million and 500 million cubic feet of gas per day.
Culzean is a significant resource and, although reserves estimates remain under wraps, Maersk has said it could provide about 5% of the UK’s total gas consumption by 2020-2021.
Maersk is also eyeing it as a likely hub to develop other fields in the area.
Culzean project manager Martin Urquhart said KBR was selected from a “good list” of recognised contractors and presented the best technical team and commercial offer.
Maersk Oil UK operates Culzean with a 49.99% interest alongside JX Nippon Exploration & Production (34.01%) and BP (16%).
Culzean is expected to benefit from the UK Government’s planned extended tax allowance for UHPHT fields.
UK financial secretary to the Treasury, Nicky Morgan said: "It's great news that significant progress is being made in the development of Culzean, with the first contract being awarded to a UK company.
"This is an early indication that the new (UHPHT) allowance announced at Budget will enable substantial investment in the North Sea.
"Culzean and other projects supported by the new allowance are expected to create and sustain thousands of jobs across the UK."
For more on the contracting targets, see Friday’s edition of Upstream.