The UK government has given consent for Total and Dong Energy to develop the Laggan and Tormore gas fields, which lie in 600m of water west of Shetland.
The Laggan and Tormore gas fields have global estimated reserves of around 230 million barrels of oil equivalent (boe). At peak, gas production rate of 500 million standard cubic feet per day is expected from the two fields, plus associated condensates (for a total production of 93,000 boe per day).
The UK government approval means that Total will begin construction work on the Shetland gas fields’ offshore infrastructure, and on a new gas processing plant at Sullom Voe on Shetland, in the immediate future. First gas production is planned for 2014.
After processing at the new Sullom Voe plant, Laggan and Tormore gas will transit through a new 230km export pipeline from Shetland into the existing Frigg UK line and onward to the Total operated Saint Fergus gas terminal, located north of Aberdeen.
Peter Mandelson, business secretary, said: ”The announcement today that this GBP2.5bn investment is going ahead is a major win for the Shetlands, for Scotland and for the UK. The new investment will involve a new gas processing terminal which will create up to 500 jobs in the Shetland during construction and the project overall will support about 2,100 UK jobs during its lifetime.
”It will be a major technical challenge developing the deepest gas fields to date on the UK continental shelf, Laggan and Tormore. The recent initiative by the Treasury in extending Field Allowance to such fields has been particularly important.”
Stephen Hunt, energy minister, said: ”This is a huge step forward for the wider development of the West of Shetland area which still contains about a fifth of the UK’s oil and gas reserves. As we make the transition to a low carbon future, we must ensure we have secure energy supplies by making the best use of our indigenous energy through projects like Laggan and Tormore.”