Serica Energy building new pipeline after Lomond suffers wax blockage

Oil and gas company Serica Energy announced on Tuesday that following the identification of a blockage in the Lomond to Everest pipeline it will construct a new pipeline at its Erskine oilfield project.

The decision to construct a new 26km bypassing pipeline follows news that pipeline operator Chrysaor Limited has been unable to clear the wax deposit blockage which was found during cleaning operations in January.

The pipeline is essential for the exporting of fluids from the Erskine field, which Serica has an 18% stake in.

Mitch Flegg, chief executive of Serica Energy, said: “While we are disappointed that efforts by the Lomond field operator to clear wax from the Lomond condensate export line have not been successful we are pleased that plans to achieve a permanent solution for this recurring problem are progressing well.”

The approvals for the construction of a new pipeline is expected to be granted in July, with work following in August and production restarting in September.

The closure of the project in the meantime will afford Chrysaor and Serica time to work through a backlog of maintenance work.

“The operator is taking the opportunity to perform significant extra maintenance work during the planned 2018 Lomond shutdown. This should lead to improved performance later this year and in future years to the long-term benefit of the Erskine field. Although this is expected to extend the Erskine shut in to September, there was no certainty that the clearance work would have been successful but would have still incurred additional ongoing cost,” said Flegg.

As of 0844 BST, Serica Energy’s shares were down 3.49% at 83.00p.