Independent Oil and Gas plc (IOG), the development and production focused Oil and Gas Company, has signed a Letter of Intent (LOI) with Offshore Design Engineering Limited (ODE) to perform several key contractor roles for its Blythe Hub and Vulcan Satellites Hub development (the Project), starting with technical and operational support ahead of Final Investment Decision (FID).
Highlights:
- ODE to provide extensive technical and operational support to IOG in both pre- and post-FID stages to deliver the Project into production
- ODE to be the Operations & Maintenance service provider
- Pre-FID costs to be fully deferred and pre-First Gas costs to be 50% deferred until first gas, thereby reducing IOG’s funding requirements
- LOI further strengthens IOG commercial model with ODE as a key contractor incentivised to deliver first-rate performance
ODE will be responsible for the operational management of all IOG’s assets and for the Thames Pipeline and network of in-field pipelines, with IOG continuing to be 100% Licence Owner and Operator for all assets in the Project. It is also intended that ODE will be the Operations and Maintenance contractor upon first gas, hosting IOG’s onshore operational base at its facilities in Great Yarmouth, close to the Bacton terminal. The pre-FID technical and operational support work is due to start immediately while contract terms are being finalised.
Mark Routh, CEO and Interim Chairman of IOG commented:
We are very pleased to be working with ODE who will be a trusted partner in IOG’s Blythe Hub and Vulcans Satellites Hub development. ODE has a wealth of relevant experience and manages several fields for other Operators in the Southern Gas Basin of the UK North Sea, so we will benefit from synergies with their existing operations. In line with our commercial model, the cost deferrals also tangibly improve IOG’s funding position both before and after FID.
This LOI reflects the team’s continued strong progress with the IOG gas portfolio. We look forward to finalising the contract with ODE and agreeing similar terms with other key contractors to continue delivering our gas hub strategy.
