TIDMORCA
RNS Number : 7008K
Orcadian Energy PLC
09 May 2022
9 May 2022
Orcadian Energy plc
("Orcadian Energy", "Orcadian" or the "Company")
Orcadian Report provides carbon emissions solution for North
Sea
Orcadian Energy (AIM: ORCA), the low-emissions North Sea oil and
gas development company is delighted to present its final report
into Central North Sea electrification, which has now been
delivered to the North Sea Transition Authority (NSTA, previously
known as the Oil and Gas Authority or the OGA) and operators of
facilities in the Central North Sea. "Orcadian's Microgrid Concept"
for the electrification of oil and gas platforms aims to
dramatically cut carbon emissions, ensuring that the oil and gas
that features in our future energy mix is as sustainable as
possible.
Orcadian and its consortium partners have designed what they
believe is a viable, reliable, off-grid option for powering North
Sea platforms. The approach is founded on power from floating wind
turbines, supported by energy efficient and highly responsive
gas-powered generators with enough battery power to maintain a
reliable supply. Floating distribution hubs will be used to collect
the power from the wind turbines and distribute power to the
operators' platforms through a network of cables. The Directors
believe this design can be more effective and cost substantially
less than cable from shore solutions, with a potential to deliver
an earlier and deeper cut to emissions. The Directors also believe
future operating costs can be substantially reduced with this
solution, which could enable mature fields to keep producing longer
and facilitate development of satellite discoveries with minimised
emissions. All of these outcomes would enhance the UK's energy
security and would ensure that emissions from North Sea oil and gas
production remain world leading.
Advantages of the Orcadian approach include:
-- Emissions reductions - approaching an estimated 80% reduction for offshore facilities.
-- Lower costs - potential saving of almost US$2 billion and
more than 25% cheaper compared to a solution that uses power from
the UK grid, when capital and ten years of operating costs are
included, for a subset of platforms.
-- A practical way for operators to meet their North Sea
Transition Deal commitments in terms of both the emission reduction
targets and timeframe.
-- Could be delivered quickly, and in phases, which allows a
staged deployment with a steadily improving reduction in
emissions.
-- Opportunities for the core infrastructure to be re-used or
redeployed - which could provide legacy infrastructure for the grid
and/or other users.
Steve Brown will present the concept at the DEVEX 2022 event
being held at P&J Live in Aberdeen on the 10(th) May 2022.
Following the submission of the report Orcadian will now
approach the appropriate operators with a proposal to further
progress the electrification concept. If the concept was adopted by
an operator, Orcadian and its partners would look to enter an
agreement with its customers and further announcements would be
made at that time. The Company is also exploring possibilities to
participate in the upcoming Crown Estate Scotland INTOG (Innovation
and Targeted Oil and Gas) offshore wind leasing round to support
implementation of the concept.
A summary of the report is available on the Company's website:
https://bit.ly/Orcadian_Electrification_Paper
Steve Brown, CEO of Orcadian Energy, commented:
" We believe the UKs pursuit of greater energy security and
sustainable oil and gas solutions has reached a key turning
point.
"Electrification of offshore oil and gas is not easy, but the
North Sea Transition deal provides the imperative to do this. It is
our view that oil and gas will remain an essential part of the
energy mix for the United Kingdom for years to come and we must
ensure that those hydrocarbons are extracted in the cleanest
possible way.
"Our concept could not only help further ensure the energy
security of the United Kingdom but could also ensure that North Sea
production will become amongst the lowest for carbon emissions
globally, returning the North Sea to its accustomed role as a
trailblazer for the industry. The consortium that we have put
together has the expertise to work with the operators and NSTA to
deliver our concept.
"We believe the implementation of this concept across the North
Sea would have significant benefits for the operators, the oil and
gas industry and the United Kingdom. We look forward to working
closely with all the stakeholders with a view to delivering this
across the North Sea."
For further information on the Company please visit the
Company's website: https://orcadian.energy
Contact:
Orcadian Energy plc + 44 20 7920 3150
Steve Brown, CEO
Alan Hume, CFO
WH Ireland (Nomad and Joint Broker) +44 20 7220 1666
Katy Mitchell / Andrew de Andrade (Nomad)
Harry Ansell / Fraser Marshall (Corporate
Broking)
Shore Capital (Joint Broker) +44 20 7408 4090
Toby Gibbs / James O'Neill (Advisory)
Tavistock (PR) + 44 20 7920 3150
Nick Elwes / Simon Hudson orcadian@tavistock.co.uk
Charlesbye (PR) + 44 7403 050525
Lee Cain / Lucia Hodgson
The Orcadian Consortium
Funded by the NSTA, the Orcadian consortium consists of Orcadian
Energy, Crondall Energy, Petrofac, Wärtsilä, Enertechnos, and North
Sea Midstream Partners and has developed an innovative solution
which realises significant emissions reduction through
electrification of existing facilities, whilst also breaking down
the electrification project into manageable pieces.
The Orcadian consortium has considered it vital to remember
during the conceptual design phase that the needs of the consumer
are the priority, and our approach has been to demonstrate a
secure, decarbonised, reliable power source that will be relatively
easy for operators to incorporate into their facilities.
Development of the microgrid solutions has only been achieved by
extensive collaboration between the consortium members, Orcadian
Energy, Crondall Energy, North Sea Midstream Partners (NSMP),
Wärtsilä, Enertechnos and Petrofac.
-- Orcadian Energy is the custodian of the microgrid concept,
acting as the microgrid system operator, owner of the commercial
model, and the technical concept.
-- Crondall Energy is Orcadian Energy's client engineering team,
managing the delivery and development of the Microgrid concept.
-- North Sea Midstream Partners (NSMP) are an infrastructure
investor and are also supporting the development of the commercial
model for the microgrid concept.
-- Wärtsilä is a global leader in innovative technologies and
lifecycle solutions for the marine and energy markets. Wärtsilä are
a key equipment vendor for the microgrid concept, providing highly
efficient, low emissions gas fired engines, as well as the energy
storage system.
-- Enertechnos is a cable technology provider, with their
patented cable providing the potential for a significant increase
in the transmission distance for MV AC power.
-- Petrofac is a global energy services company providing
expertise on how to implement the microgrid concept from an
Engineering Procurement and Construction (EPC) and Operations &
Maintenance (O&M) perspective.
About Orcadian Energy
Orcadian is a North Sea oil and gas operator with a difference.
In planning its Pilot development, Orcadian has selected wind power
to transform oil production into a cleaner and greener process. The
Pilot project is moving towards approval and will be amongst the
lowest carbon emitting oil production facilities in the world,
despite being a viscous crude. Orcadian may be a small operator,
but it is also nimble, and the Directors believe it has grasped
opportunities that have eluded some of the much bigger companies.
As we strike a balance between Net Zero and a sustainable energy
supply, Orcadian intends to play its part to minimise the cost of
Net Zero and to deliver reliable organic energy.
Orcadian Energy (CNS) Ltd ("CNS"), Orcadian's operating
subsidiary, was founded in 2014 and is the sole licensee of P2244,
which contains 78.8 MMbbl of 2P Reserves in the Pilot discovery,
and of P2320 and P2482, which contain a further 77.8 MMbbl of 2C
Contingent Resources in the Elke, Narwhal and Blakeney discoveries
(as audited by Sproule, see the CPR in the Company's Admission
Document for more details). Within these licences there are also
191 MMbbl of unrisked Prospective Resources. These licences are in
blocks 21/27, 21/28, 28/2 and 28/3, and lie 150 kms due East of
Aberdeen. The Company also has a 50% working interest in P2516,
which contains the Fynn discoveries. P2516 is administered by the
Parkmead Group and covers blocks 14/20g and 15/16g, which lie
midway between the Piper and Claymore fields, 180 kms due East of
Wick.
Pilot, which is the largest oilfield in Orcadian's portfolio was
discovered by Fina in 1989 and has been well appraised. In total
five wells and two sidetracks were drilled on Pilot, including a
relatively short horizontal well which produced over 1,800 bbls/day
on test. Orcadian's proposed low emissions, field development plan
for Pilot is based upon a Floating Production Storage and
Offloading (FPSO) vessel, with over thirty wells to be drilled by a
Jack-up rig through a pair of well head platforms and provision of
power from a floating wind turbine to provide much of the energy
used in the production process.
Emissions per barrel produced are expected to be about an eighth
of the 2020 North Sea average, and less than half of the lowest
emitting oil facility currently operating on the UKCS. On a global
basis this places the Pilot field emissions at the low end of the
lowest 5% of global oil production.
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