Soaring gas prices put the North Sea back on the exploration map

Soaring gas prices put the North Sea back on the exploration map

In March, the valves on an offshore pipeline 30 miles off the Norfolk coast were opened for the first time to release gas drilled from more than 7,000 feet under the seabed.

Aim-listed IOG will pump it to the nearby Bacton terminal where it will be processed for sale to BP’s gas marketing arm, which will distribute it to households, power stations and industrial groups making goods such as plastics and medicines.

From the North Sea’s 1970s heyday until the early 2000s, the UK was able to meet all its own gas demand. But production has declined sharply over the past two decades and the country now imports more than 60 per cent of its needs via pipelines from Norway and the EU, and ships carrying liquefied natural gas from the US and Qatar.

After years of falling investment in North Sea infrastructure, soaring gas prices are prompting a new wave of interest in gas exploration on the UK’s continental shelf.

With some oil and gas majors such as BP and Shell divesting assets in recent years, much of the rejuvenation is being led by smaller companies such as IOG, Neptune, Kistos and Serica.

“There’s a lot more interest in exploring North Sea gas,” said Ashley Kelty, analyst at Panmure Gordon. “Small