REG - Orcadian Energy PLC - Orcadian Report provides carbon emissions solution

Orcadian EnergyAnnouncement

09/05/2022 07:00

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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
(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 (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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