Energy and Utility Management Consultants

North Sea platform goes offline; new investment in fracking announced

January 2013

 

A leak on the North Sea oil platform, the Cormorant Alpha, has been reported by operator Abu Dhabi National Energy this week, and affects a total of nine platforms in the vicinity of the pipeline infrastructure, located some 94 miles from the coast of Shetland. Upon detecting hydrocarbons in the leg of Cormorant Alpha, all non-essential workers were evacuated as a precaution – the leak is not thought to have polluted the sea at all and is said to have now been contained.  The platform itself contains a crucial pumping station and so outages affect a large number of oil fields as well as local platforms; up to 27 fields are affected by this outage, representing some 90,000 barrels of oil per day; 10% of the North Sea total production. While speculation is rife surrounding the impacts of the outage on the markets, it is not thought that much affect will be seen owing to the relatively small amount of total global production concerned. No restart date has yet been given. Not an ideal situation by any stretch of the imagination, but thankfully not as influential on markets as many political situations or conflicts across the globe.

 

A further boost to fracking in the north-west of England has come in the form of a £15m investment in the drill sites at Irlam in Greater Manchester and at Ellesmere Port in Cheshire. The welcome injection is coming from IGas who had been holding out on a decision due to the delays of the UK government in permitting the extraction technique to resume in the UK. Following the green light at the end of last year, and the newly formed Office for Unconventional Gas & Oil (bizarrely dubbed “Off-u-go”) has prompted new interest and confidence in investment. Hopefully other investors will follow suit and start ploughing much needed funds into the UK energy infrastructure. Although the fracking sites are not expected to be fully active until next year; the news is still welcomed as we look toward further securing UK gas and energy supply – it is predicted that the UK is home to several trillion cubic feet (tcf) of gas; our annual consumption is little above 3tcf per year; so the long-term prospects are interesting if nothing else.

 

As part of our procurement process, we regularly look to negotiate electricity and gas contracts for our clients earlier than normal, depending on market circumstances. For instance, just recently we recommended a client closed their tenders almost 5 months earlier than the renewal date.  We are pleased to report that closing these tenders early resulted in additional savings – due to increases in the commodity markets between the time that the contracts were negotiated and the usual renewal time – to the sum of more than £6,500. This resulted in a payback period of annual our fees for these particular accounts of less than 6 weeks. This was possible by simply taking a proactive view of our client’s accounts as opposed to just sitting on accounts until renewal time. Get in touch using the links on this page; you’ll find that our Utility Bureau Service and Energy Procurement experts can offer unique and rewarding management of your business energy needs.

 

 

 

 

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