Scottish and Southern Energy (SSE) has entered into an agreement with Hess Limited to acquire its natural-gas assets and infrastructure in three regions of the North Sea for $423m (£278m).
The total gas and liquid resources that SSE is acquiring total around 383bn cubic feet (bcf), or 64 million barrels of oil equivalent (mmboe). The transaction price for these resources is $6.6/barrels of oil equivalent (boe), or $1.1/million cubic feet (mcf). Additional, less certain resources of gas may also be identified through further exploration.
The main production asset operators are BG Group, BP and Perenco.
SSE currently needs on average around 1300mcf of gas per day to supply its customers and to fuel its power stations; gas from the acquired assets will initially provide around eight per cent of that total, declining over the next 10 years.
While the upstream gas assets represent the large majority of the transaction, SSE will also acquire a number of other assets from Hess, including its 17.7 per cent equity interest in the Central Area Transmission System (CATS) pipeline, which delivers more than 10 per cent of the UK’s total gas demand through a 400km pipeline from the central North Sea to a processing terminal in Teesside. The CATS pipeline is operated by BP.