BP Makes Strides on Devenick Gas Project

BP (NYSE:BP) announced today that they have made strides on their Devenick gas project in the central North Sea.  First discovered in 1983, the Devenick field is located 35 kilometers north of Marathon Oil’s East Brae platform.

BP said that on September, 29th that a 600-tonne module developed by Aker Solutions was placed onto the East Brae platform without any problems and is the new host for subsea development.  The module allows gas and condensate to be received from the Devenick reservoir and will separate them before transport through the two existing pipeline networks.

The UK is poised to benefit from the new development as the country will be able to receive gas from the Devenick gas project in 2012 should no complication arise.  After being ramped, production is expected to peak in 2013 and will have a volume of 200 million standard cubic feet per day which roughly translates to approximately 3 per cent of UK gas production according to BP.

BP released the following statement in regard to today’s development, “The Devenick project is the latest demonstration of BP’s strategic objective to sustain a material and high quality business in the North Sea.  The project will provide an important source of domestic gas to the UK and is providing a source of employment in the UK for some 1,100 people over the lifetime of the project.  Around 90 per cent of the project expenditure is occurring in the UK,” said Trevor Garlick, Regional President for BP’s North Sea business.

They company also said that from development they will connect gas production from two new wells to the Devenick subsea manifold by way of insulated flow-lines.  From the manifold, gas flow will be combined being before sent to Marathon’s East Brae platform in a single insulated 34 kilometer pipeline.  After that, gas will be exported from the East Brae platform through the SAGE transportation pipeline system to the terminal at St Fergus.  Lastly, oil production is to be exported from the East Brae platform through the Brae Liquids Pipeline to the Forties Pipeline System according to the company.

Estimates have it that the total amount of gas in the Devenick field to be at about 430 billion standard cubic feet which should last until around 2025.  Regarding ownership, BP owns 88.7% and RWE Dea UK the remaining 11.3%.

BP shares refilled yesterday’s price gap and is standing at an intraday gain after opening low.  Overall, BP has been on an eight-day bullish run after setting a 52-week low of $33.62 on October 4th.