COPENHAGEN: Denmark’s Maersk Oil, part of conglomerate A. P. Moeller-Maersk A/S AMKBY, +0.31% said Monday it is considering shutting down a key gas field in 2018 due to aging assets and a sinking underground, highlighting the challenges of replacing offshore infrastructure amid weak prices and market uncertainty.
“Production from Tyra East and Tyra West in the Danish North Sea will cease on 1 October 2018, if an economically viable solution for continued operations is not identified during 2016,” the company said.
Tyra is Denmark’s largest gas field and still has resources left to produce. However, its facilities are near the end of their operational life after producing for more than three decades. The underground reservoir is also subsiding, which is a security issue because it brings the platform decks closer to the sea surface.
“We are now evaluating long-term economically viable solutions for recovery of the remaining resources,” said Martin Rune Pedersen, managing director of Maersk Oil Denmark. “As part of this, we will consider the terms under which a rebuild of the facilities could take place.”
The field’s partners have spent more than 1 billion Danish kroner ($152.8 million) over the last 15 years to reinforce the facilities and prolong production at Tyra, the company said.
Tyra is a field center with processing and export facilities that handle more than 90% of the country’s gas production. If those facilities are decommissioned, nearby fields in the Danish North Sea would have to find other ways to bring their gas to the market.
The Tyra field is operated by Maersk Oil on behalf of the Danish Underground Consortium, a partnership between A.P. Moeller-Maersk with a 31.2% share, Shell with a 36.8% share, Nordsøfonden with a 20% share and Chevron with a 12% share.
