Maersk Oil, partners to move ahead with $3.4bn Tyra redevelopment project
Oil and gas industry news : Maersk Oil and its partners as part of the Danish Underground Consortium (DUC) are all set to invest around DKK 21 billion ($3.4 billion) for the Tyra redevelopment project in the Danish North Sea.
The full redevelopment of the Tyra gas field would result in continued production from what is the largest gas field in Denmark apart from protecting and rejuvenating major Danish North Sea infrastructure.
Maersk Oil, which is part of Copenhagen-based conglomerate A. P. Moller-Maersk Group, is the operator of the Tyra gas field with a stake of 31.2%. The Danish oil and gas company is set to be acquired by French oil and gas giant Total for $7.45 billion following a deal made in August.
Maersk Oil’s partners in the Tyra gas field are Royal Dutch Shell with a stake of 36.8%, Danish national oil and gas company Nordsofonden which holds a stake of 20% and Chevron which has a stake of 12%.
The sanctioning of the Tyra redevelopment project marks the largest oil and gas project investment in the Danish North Sea. It will help Tyra gas field to extend its operations for a minimum of 25 years.
Maersk Oil claims that the Tyra gas field accounts for 90% of the gas production in the country.
The redeveloped Tyra gas field, at peak production is estimated to deliver enough gas to meet the needs of 1.5 million Danish households while helping in addressing energy security, generate future tax revenues and jobs for Denmark.
Commenting on the Tyra redevelopment project, Martin Rune Pedersen – Chief Operating Officer of Maersk Oil, said: “The redevelopment of Tyra is evidence of a shared interest in prolonging the life of the Danish North Sea.
“The investment in this globally significant oil and gas project will support several thousand Danish jobs, and it can enable future significant industry investments in new development projects made possible by the redeveloped Tyra gas infrastructure.”
According to Maersk Oil, new development projects and association with third parties along with the Tyra redevelopment can be a catalyst for stretching the life of the Danish North Sea for the company and the DUC, and also for Denmark.
After the completion of the Tyra redevelopment project, the offshore gas field is anticipated to produce around 60,000 barrels of oil equivalent per day at peak. It is also estimated that the redeveloped Tyra gas field could facilitate an additional production of over 200 million barrels of oil equivalent.
About two third of the production from the redeveloped field is likely to be gas while the remainder will be oil.
Maersk Oil has revealed that the Tyra field will cease production in November 2019 for its redevelopment work, and is anticipated to restart production in July 2022.
DUC will be spending around DKK 17 billion ($2.7 billion) for upgrading existing facilities and construction of new facilities at the Tyra gas field. The consortium will allocate DKK 4 billion ($640 million) for the removal and decommissioning of certain existing facilities.
The announcement on Tyra redevelopment project comes after the approval of the Danish Parliament to execute legislation to secure the investment for the offshore gas project.
Lars Chr. Lilleholt (V), Denmark Minister for Energy, Utilities and Climate, commenting on the Tyra redevelopment project, said: “I am pleased that the DUC partners have made the final decision for this investment. The full reconstruction of Tyra is vital to the development of the Danish North Sea oil and gas sector. Not just to Maersk Oil – but to many companies relying on Tyra as a central gas hub.”
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