Hartshead reaches milestone agreement with Shell for gas transportation and processing

Hartshead’s plan to commercialise its Anning and Somerville gas fields in the UK Southern Gas Basin has achieved a major milestone with Shell, agreeing key commercial terms for gas transport and processing.

The agreement provides the basis for the tie-in, transportation and processing of the company’s Phase-1 gas production through Shell’s infrastructure.

Gas from the two fields will be transported to the Shell infrastructure via a planned Hartshead Resources (ASX:HHR) owned pipeline and subsea connection.

The gas will then be transported to the Shell Leman Alpha platform before being delivered to the Bacton Gas Terminal for processing and delivery to the UK National Gas Transmission System.

Both companies will now progress to conclude full-termed binding agreements for the offtake.

Fully-termed agreements will also detail any required brownfield modifications required as part of the gas offtake route.

Development of these agreements will progress in parallel with the Front-End Engineering and Design (FEED), and final Field Development Plan (FDP) submission to the UK government.

Phase-1 gas development

Development of Anning and Somerville, which has Proved and Probable (2P) reserves of 301.5 billion cubic feet of gas, is the first step of the company’s Southern Gas Basin development.

Production will be carried out through six wells connected to two wireline-capable Normally Unmanned Installation (NUI) platforms, which will transport the gas to Shell’s infrastructure through its own subsea pipeline.

Peak production is estimated to be about 140 million standard cubic feet per day with first production expected in late 2024.

Hartshead recently launched a pre-qualification process for the gas field platform and jack Engineering, Procurement, Installation and Commissioning (EPIC) contract.

This is intended to confirm the contractor’s capability in providing a suitable facilities solution and installation package that can meet the project requirements.

It will also confirm possible schedule options including either complete topsides and jacket programs and identify any critical long lead bulk/equipment items.

This article was developed in collaboration with Hartshead Resources (ASX:HHR), a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.