LONDON (ShareCast) - (ShareCast News) - Independent oil and gas company Nostrum Oil & Gas updated the market on the progress of GTU3 on Wednesday, reporting that due to the delayed delivery of some specially designed valves required for the tie-in of GTU3 with GTU1 and GTU2, it would not be possible to bring gas into GTU3 in 2017.
The FTSE 250 firm said the previously-planned three week shutdown of GTU1 and GTU2 had thus been postponed until after the winter period.

It said the shutdown and tie-in was now scheduled to be completed in April 2018.

The tie-in would allow gas to go from GTU1 and GTU2 into GTU3, for GTU3 to be connected with the export gas pipeline and commissioning to take place.

Nostrum said commissioning was expected to be completed within approximately 60 days.

"The main reason for the delay is due to the fact that once the tie-in is completed the welding joints need to be hydro-tested prior to any gas passing through it," Nostrum's board explained.

"This testing cannot take place during the winter when temperatures are below zero."

In order to minimise the downtime of GTU1 and GTU2, Nostrum said it was more efficient to have "just one period" of downtime to complete the tie-in and the hydro-testing rather than to have two separate periods of shut down for the tie-in and hydro-testing to be carried out separately.

"Therefore the decision has been taken to move the three week shut down to the period when temperatures move above freezing, which is now forecast to be April 2018."

The result of the change in timing for the tie-in means there would be a very short shutdown of GTU1 and GTU2 in the fourth quarter, as it would be limited to the minimal required maintenance of only a few days.

Nostrum said the GTU3 plant, on a standalone basis, would be mechanically complete "well in advance" of the forecast tie-in date in April.

"The postponement of GTU3 commissioning does mean that production guidance for the first six months of 2018 will be impacted as the company will not be able to increase production above current capacity of 45,000 boepd however the target to ramp up production to 100,000 boepd by 2020 has not changed.

"Revised full year guidance for production will be given no later than year-end when the 2018 drilling programme has been set and is under way."

The company said he total cost of the plant had not been impacted by the delay to the tie-in and commissioning and remained at $532m.

"The company remains fully funded to complete GTU3 and ramp up production."

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