Page 8 - EurOil Week 17 2022

EurOil POLICY EurOil

Latvia to create gas reserves

at Incukalns

LATVIA LATVIA should establish natural gas reserves natural gas transmission and storage system
in the Incukalns gas storage facility by the end of operator AS “Conexus Baltic Grid”. The costs of
Latvia is arranging the year, according to amendments to the Energy storage of reserves will be included in the trans-
required volumes at Law approved by the Latvian Parliament, the mission service tariffs of the system operator.
Incukalns ahead of the Saeima, on April 21. The law also requires the government to
next winter. Natural gas reserves will be designed to review the amount of the necessary energy secu-
ensure a continuous supply of natural gas and rity reserves every two years on the basis of an
prevent the onset of an energy crisis. By 2023, assessment by the Ministry of Economics on the
there must be a reserve between 1.8 and 2.2 security of energy supply situation and available
TWh, depending on the available supply of LNG natural gas sources and capacity.
vessels, LSM.lv, a Latvian news website, reported The amendments will enter into force on the
on April 21. day following the announcement.
The purchase and storage of reserves will be As reported by bne IntelliNews, Lithuania has
organised by the State AS Latvenergo. Access stopped importing Russian gas and Latvia and
to gas reserves should be provided to the single Estonia, the other Baltic states, will follow suit. ™

PROJECTS & COMPANIES

Lancaster field set for early closure

UK UK junior Hurricane Energy has filed a decom- underwent a major reserves downgrade in Sep-
missioning plan for the Lancaster oilfield west tember 2020, with Hurricane cutting the amount
The problematic project of the Shetland Islands, just three years after of oil targeted in its first development phase to
has not lived up to launching production at the problematic project. just 16mn barrels. Originally it was expected to
expectations. The plan was submitted to the Offshore Petro- retrieve 37.3mn barrels over an initial six-year
leum Regulator for Environment and Decom- period. The field has been found to produce a lot
missioning (OPRED) in March, although it of water with its oil, and a decline in reservoir
covers only de-oiling, disconnection and the sail pressure has been rapid.
away of the Bluewater-operated Mizu floating Hurricane was also forced to shut down one
production storage and offloading (FPSO) ves- of Lancaster’s two production wells in 2020,
sel stationed at Lancaster. The decommissioning because of interference between the two bore-
programme should take place over a 23-30 day holes that meant the company could not main-
period in 2023, but could happen “as early as Q2 tain output at the targeted 20,000 barrels per day.
2022.” Given that Hurricane recently signed a The sole 96 well was reported as flowing at a rate
charter extension for Mizu, such an early closure of only 9,150 bpd in mid-April.
is unlikely, however. Even though the troubled projects passed the
Once removed from the site, the FPSO will so-called “bubble point” in January, referring
be returned to Bluewater for redeployment to when reservoir pressure drops to the level at
elsewhere, or decommissioning. A separate which gas is liberated from oil, Hurricane’s main
programme will need to be drawn up for the shareholder Crystal Amber had expressed hope
decommissioning of Lancaster’s wells and other at the time that the field could still be in produc-
infrastructure at the field. But a chart included tion in 2025.
in the filing indicates that end-of-life planning is Under a new agreement reached with Blue-
already underway, with production potentially water in March, the charter for Aoka has been
ceasing in the second quarter of 2023. extended to cover Lancaster’s remaining eco-
Lancaster only began producing oil in May nomic life. Either party to the deal can give six
2019. The complex, fractured basement reservoir months’ notice to terminate the contract. ™

P8 www. NEWSBASE .com Week 17 27•April•2022