Wireline Issue 44 - Spring 2019

to create new hubs and to get more out of the ground in these areas,” Craig said. “If there is another party in there that is a bit broader-minded, then perhaps there is a bit more of a future for some parts of the North Sea if more projects are done this way.” Common ground Despite the partners’ commitment, the path to project sanctioning in August 2018 was not without its challenges. The largest, according to Kellas’ AlanMurray, was the sheer volume and complexity of commercial agreements. While there was no silver bullet to overcoming this, he praised the work of commercial teams across the project who worked diligently to create terms that met the needs of all three parties. “It took a little bit of mapping out as to what we needed to do. All of the normal commercial agreements had to be created… [We] had to add additional agreements to manage the hand off between the Tolmount field to the HGS platform, but it wasn’t outwith the wit of man to do it, it just took a little bit of time.” This was aided by regular engagement with a management steering committee and — crucially — an open-book economic model between all three companies, which removed many of the traditional barriers encountered during this type of negotiation. “We spent a lot of time on having a set of fully termed agreements at FID. That was something we were all keen to do and it was a huge amount of work up front for our commercial folks, but going forward the pressure is off and we have aligned how things are going to work in future,” he added. “I think for all parties it just provides that level of clarity and commitment that allows us to go off and manage the project now, without the distractions of ongoing commercial negotiations,” echoed Premier’s Craig Matthew. “You have to find common ground, you have to find ways that work for all parties, and that was exemplified in the effort that went in pre-FID here.” There was also a late and significant change in scope. In late 2017, some months into discussions, the choice of terminal moved from Dimlington to Easington, creating a ripple effect through the project. Agreements had to be changed and new parties brought into the contracting process, but again the group’s commercial teams worked to ensure the course was stayed. A final learning experience for the group was how it communicated this blueprint to investors, supply chain and toUK regulators, including theOil and Gas Authority (OGA), Department for Business, Energy and Industrial Strategy (BEIS), Health and Safety Executive (HSE) and Offshore Petroleum Regulator for Environment and Decommissioning (OPRED). All characterised the process as constructive and positive, with Dana’s Eric Bell adding that: “I think the OGA were very open to new ideas, but we had to demonstrate it… I think if they saw MER was not being delivered then we would have had more difficulties but fortunately we were able, I believe, to show that it was being served.”

Tolmount Main / HGS 500 bcf resource £530m capex 300 million cfd peak production/p peli e capacity 48km pipeline Minimal-facilities platform with six-slot well template and helideck access Onshore tie-in at Centrica’s Easington Terminal First gas scheduled for Q4 2020

“We see the HGS/ Tolmount project as being directly replicable in other parts of the North Sea, in the UK side and Norwegian and Dutch sides.”

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