Tolmount is slated to produce around 500bn cubic feet of gas ( 96mln barrels oil equivalent ) over its lifespan, with peak production rates anticipated at up to 300mln cubic feet per day (58,000 boepd).
It is planned as a minimal facilities development, with a platform exporting gas to shore via a new pipeline.
Premier Oil’s share of the development capital is estimated at US$120mln, as a separate infrastructure partnership will own and pay for the platform and pipeline capex, as well as pay for onshore upgrades. At its end, Premier will pay a tariff for the transportation and processing through the infrastructure.
Construction work is expected to start later this year, ahead of ‘first gas’ production which is anticipated in the fourth quarter of 2020.
"The sanction of our high return Tolmount project marks a major milestone for Premier and underpins our medium-term UK production profile,” said Tony Durrant, Premier Oil chief executive.
“Tolmount is one of the largest undeveloped gas discoveries in the Southern North Sea and is, in barrel of oil equivalent terms, similar in size to our Catcher project.
“We have also secured an innovative financing structure for the project which minimises our capital expenditure whilst maintaining our exposure to the upside in the Greater Tolmount Area."
Premier owns 50% of Tolmount alongside Dana Petroleum which owns the other 50% and is one of two stakeholders in the separate pipeline partnership.