SSE buys stake in Shetland gas fields from Total

Energy supplier SSE has agreed to acquire a 20% stake in four North Sea gas fields and a 20% stake in a gas plant from France's Total for a total of £915m including future development investments.

SSE will pay an initial £565m for the gas fields offshore the Shetland Islands and will need to contribute a further forecast investment of £350m up until 2018 to complete the entire development, of which £170m is due in the current year.

The first field is expected to begin producing later this financial year, with peak production at a daily total of around 5m therms of gas expected to be achieved during 2016, of which SSE will own one fifth.

As a result of this addition of new producing gas fields, SSE estimated that it will hold reserves and resources of over 6bn therms, or over 100m barrels of oil equivalent, over the life of all of the fields it has an interest.

The new Shetland Gas Plant, located close to Sullom Voe oil terminal, produces gas and condensate from developments in the west of Shetland for onward delivery to the St Fergus gas terminal, which SSE said made it "one of the most important infrastructure developments in the UK".

It is expected to become fully operational during 2015 and is expected to process and export gas and condensate for producers west of Shetland well into the 2030s.

Chief executive Alistair Phillips-Davies said: "The acquisition means we will be able to introduce further diversity across our investment programme. It comes following a period of relatively low wholesale gas prices and is therefore timely.

"It completes our portfolio of gas production assets for the foreseeable future."

"The acquisition, including the Shetland Gas Plant, represents further investment in the UK energy infrastructure that gives access to gas from northwest Europe to help secure energy for customers and to help meet the needs of our gas-fired power stations, which will have an important part to play in supporting security of electricity supply."

By 09:30 London time, shares in SSE were down 2p to 1,505p after an early spike higher.