Midstream & MER

Midstream infrastructure is critically important to the future of the North Sea as it underpins the industry’s ability to maximise economic recovery (MER) in the UKCS.

Put simply, without the right transportation and processing infrastructure in place, it will not be possible to fully exploit existing and new fields.

Until recently, most midstream infrastructure in the North Sea was owned and operated by major upstream operators. However, the landscape is changing and many of the majors are divesting their midstream assets as they are no longer core to their portfolios, they have a smaller share of volume throughputs, and they require significant, ongoing investment.

This creates an opportunity for dedicated private equity infrastructure investors. In addition to having access to different sources of capital, the midstream assets they acquire are core to their portfolio, and they are committed to investing in them to build safe, successful and sustainable businesses.

Dedicated infrastructure owners like Kellas Midstream are fully incentivised to maximise throughput, deliver high uptime and extend the life of midstream assets.

We believe that maximising economic recovery will be best served by upstream and midstream operators working closely together to stimulate future investment, an approach that is aligned with the Oil & Gas Authority's view that MER will be driven by the right assets being in the right hands.

We are not in competition with upstream operators. Upstream operators are our customers and focusing on their needs is a business imperative.

We seek ways to collaborate not only with our customers, but with our partners and other stakeholders to increase the volume of gas produced in the North Sea, using innovative models that challenge conventional ways of working.

Our contribution to maximising economic recovery in the UKCS was recognised by the industry when the HGS/Tolmount infrastructure partnership won an MER UK award at the 2018 Oil & Gas UK Awards.

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Midstream supporting MER

Dedicated independent midstream owners like Kellas Midstream are supporting MER.

Supporting MER by:

Securing the long-term availability of and access to critical infrastructure

Creating a level playing field for all gas producers by treating them on a non-discriminatory basis

Seeking win-win solutions with upstream operators to get the most out of existing and planned offshore hubs

Investing directly in existing and new infrastructure, which incentivises upstream investments