North Sea gas field project backed by Warren Buffett delayed

NORTH Sea-focused IOG has seen its shares plunge around five per cent after facing challenges on a gas field development project backed by US billionaire Warren Buffett.

IOG said the expected start of production from the development has been delayed while work continues on facilities that will be used to handle the output from the fields concerned.

The company said Pre-First Gas commissioning activities at the Bacton Terminal in Norfolk are now expected to carry over into the early weeks of 2022. It said progress on the work has continued in recent weeks despite some difficult weather conditions.

In an update issued last month IOG said it continued to work closely with Bacton terminal operator Perenco and an enlarged workforce to complete the reception facilities recommissioning and deliver first gas in the final quarter of this year but noted: “This may be challenging”.

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The progress of the project will be followed closely in the industry, after IOG spotted the potential of finds made years ago that other firms had left undeveloped.

It is working on a project to develop a number of Southern North Sea finds, which has involved installing production infrastructure offshore and bringing disused facilities back into operation.

In 2019 a company owned by Mr Buffet’s Berkshire Hathaway paid £40 million for a 50 per cent stake in the project and agreed to cover up to £125m of IOG’s costs.

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In November IOG chief executive Andrew Hockey said the first phase of the project looked set to capitalise on very strong gas prices whilst providing “low carbon intensity” UK production.

Shares in IOG closed down 1.5p at 30.5p yesterday. The company used to be known as Independent Oil & Gas.

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