FRENCH energy giant Total has vowed to remain “a major player” in the North Sea industry, despite selling the St Fergus gas terminal in Aberdeenshire as part of a £585 million deal.
The sale, to infrastructure firm North Sea Midstream Partners (NSMP), also includes the group’s interests in two gas pipelines and comes less than a month after it reduced its stake in a raft of Shetland gas projects.
Along with the St Fergus processing plant, which lies north of Peterhead, Total is selling its 100 per cent interest in a 225-mile pipeline built in 1977 to connect the terminal to the Frigg field in the North Sea. Production at Frigg stopped in 2004 and decommissioning work was completed five years ago, but the pipeline is still operational, delivering gas from some 20 fields in the northern North Sea to St Fergus.
NSMP, launched in 2012 to invest in facilities such as storage and processing plants, will also buy Total’s 67 per cent stake in the Shetland Island regional gas export system, a 145-mile pipeline that connects the Frigg line to the Shetland gas plant, known as Laggan-Tormore.
Last month, Perth-based energy group SSE struck a deal to pay Total £565m for a 20 per cent stake in Laggan-Tormore, along with interests in the Laggan, Tormore, Edradour and Glenlivet fields.
It had been reported earlier this year that Total had put its entire 80 per cent stake in the project up for sale with an estimate price tag of $1.5 billion (£970m) as part of a disposal plan linked to the slide in oil prices. The firm is targeting the sale of $5bn of assets this year.
Total’s chief financial officer, Patrick de La Chevardière, said the sale of the St Fergus plant and pipeline interests “is another example of Total’s strategy of active portfolio management and the strong potential to unlock value from a range of infrastructure assets”.
He added: “Transferring ownership to an entity specialising in midstream UK assets creates value for us and ensures a long and bright future for the facilities.”
Following completion of the sale, the systems will be operated on behalf of NSMP by PX Group, which already operates its gas processing plant in Teesside.
NSMP chief executive Andy Heppel said: “We are very excited to be acquiring these key assets from Total. We see midstream infrastructure as crucial to the longevity of the North Sea and firmly believe that the independent ownership of such infrastructure can help maximise the ultimate economic recovery of the UK Continental Shelf’s oil and gas reserves, consistent with the findings of the Wood Review.”
Heppel added: “Total remains a major owner of fields feeding into this infrastructure including the Laggan-Tormore and Martin Linge new developments. We look forward to working with Total and the other field owners and operators to provide a safe, reliable and cost-effective gas transportation and processing service for the long term. In the interim we will be working closely with Total, PX Group and directly affected staff to ensure a smooth transition of operations.”
Total said that, by the end of this year, it expects to be the largest producing oil and gas company in the UK and “will remain a major player in the North Sea offshore industry for many years to come”.
• Aberdeenshire Council has approved plans by a Scandinavian consortium to build an electricity converter station and underground cables near Peterhead. NorthConnect, a tie-up between Swedish utility Vattenfall and three Norwegian firms, aims to connect power networks in the UK and Scandinavia via a 400-mile underwater power cable between north-east Scotland and Norway. It is scheduled to start operating from 2022.