REG - Orcadian Energy PLC - Report on carbon emissions solution for North Sea

Orcadian EnergyAnnouncement

23/06/2022 10:15

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RNS Number : 9519P  Orcadian Energy PLC  23 June 2022

 

 

 

23 June 2022

Orcadian Energy plc

("Orcadian Energy", "Orcadian" or the "Company")

 

Report on carbon emissions solution for North Sea

 

Orcadian Energy (AIM:ORCA), the low-emissions North Sea oil and gas
development company, is pleased to announce that the North Sea Transition
Authority ("NSTA") published, this morning, the full report prepared by the
Company and its partners, for the Platform Electrification competition
launched in September 2021.

The competition sought electrification concepts that could minimise carbon
emissions for existing North Sea platforms. "Orcadian's Microgrid Concept"
aims to dramatically cut carbon emissions, ensuring that the oil and gas that
features in our future energy mix is as sustainable as possible. The full
report and a summary are available from the Company's website.

 

Background

 

As announced on 9 May 2022, 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.

The full report, as well as the list of documents that can be downloaded, is
available on the company's website:
https://orcadian.energy/esg/net-zero-basin/
(https://orcadian.energy/esg/net-zero-basin/)

 

Steve Brown, Orcadian's CEO, said:

 

"The report we have produced with our partners provides a solution that
ensures that oil and gas can be produced with much lower emissions and in line
the North Sea Transition Deal agreed with Government in 2021. Oil and gas will
remain an important part of the energy mix and the industry aims to deliver
that energy in the cleanest way possible. We look forward to working with
NSTA, the oilfield operators, as well as our partners to deliver this concept
as a reality on the UKCS."

 

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 / Liam Zabludowicz (Advisory)
 Tavistock (PR)                                       + 44 20 7920 3150
 Nick Elwes / Simon Hudson                            orcadian@tavistock.co.uk (mailto: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 focused, low emissions, oil and gas development
company. 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 vessel (FPSO), 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.

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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