Plans to shut down a vital terminal in the North Sea have sparked a bitter legal row over claims it will damage the UK’s oil and gas production.
The proposal by French energy giant TotalEnergies to decommission the Gryphon terminal, which serves four offshore oil and gas fields, has triggered a claim from a rival operator.
Nobel Upstream, which operates two of the fields reliant on the Gryphon, has launched a judicial review in a last-ditch attempt to halt the process.
However, rather than suing TotalEnergies, Nobel Upstream has issued its claim against the North Sea Transition Authority (NSTA), which has signed off on the closure.
It has warned that if TotalEnergies is allowed to shut the Gryphon then it will not only be forced to abandon its two fields but it will also quit the North Sea entirely.
TotalEnergies is seeking to decommission the Gryphon amid declining production levels.
However, Nobel Upstream has claimed that the closure has been made prematurely and is in breach of NSTA rules requiring shared installation to remain open.
It has also alleged that the decision will mean hundreds of millions of pounds worth of oil and gas will be left untapped in subsea fields.
Nobel Upstream said it has launched a legal challenge against the NSTA’s “unlawful” decision to scale back Britain’s oil production prematurely.
It accused the NSTA of failing to act in compliance with the law, which calls for it to “maximise economic recovery of hydrocarbons from the UK”.
The decision to decommission the Gryphon, which awaits final sign-off by the Department for Energy Security and Net Zero, is likely to set a precedent for many North Sea producers. That is because the vast majority rely on shared infrastructure to remain in business.
Perhaps the largest shared terminal is the Forties Pipeline System, owned by Ineos, which takes the output from up to 80 separate fields across the North Sea.
When it shut down for repairs two years ago, so did the fields that relied on it – fuelling a sharp drop in the UK’s oil and gas production.
Meanwhile, the Gryphon is anchored 200 miles north-east of Aberdeen over the Gryphon oil and gas field, although it also receives output from three other fields, including the Tullich, Maclure and Ballindalloch. The gas is exported directly to the UK mainland where it enters the national gas grid to support power stations and heat millions of homes.
In total, the Gryphon supplies around 1pc of the UK’s total gas production.
Ashley Kelty, a senior analyst at Panmure Liberum investment bank, said the NSTA had been set up to regulate the oil and gas production from the UK’s surrounding seas – with an obligation to ensure “maximum economic recovery”.