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White House Shelves Coal Industry Incentives Plan

White House Shelves Coal Industry Incentives Plan

Troubled coal-fired power plant operators…

Total Opens $5B Gas Plant off Shetland Islands

Total Gas Plant Shetlands

French energy giant Total SA has officially cut the red tape on a US$5-billion gas processing plant on the British Shetland Islands that will eventually produce enough energy to supply some 2 million homes.

The plant is expected to reach production of 500 million cubic feet of gas per day, or the equivalent of 90,000 barrels of oil, making it the largest project in the UK in recent years.

About 2,500 workers were employed to build the gas processing facility, for which construction began in 2010.

Related: Oil Markets Balancing Much Faster Than Thought

The plant began processing gas extracted from the Laggan and Tormore fields, North West of Shetland, on February 7, eventually ramping up to its full 90,000 barrels per day capacity for its official opening on Monday.

This western Shetland region contains an estimated one-fifth of the UK's remaining oil and gas reserves, and the Laggan-Tomore development is expected to provide around 8 percent of the UK's gas needs.

Gas from these fields, which are some 77 miles off the coast, is then piped to a plant near the Sullom Voe Terminal before being transported to the UK mainland via pipeline and injected into the grid.

Related: Falling Chinese Demand Could Intensify The Oil War

Total chairman Patrick Pouyanne said, "The Laggan-Tormore development demonstrates Total's continued commitment to the United Kingdom. By opening up its third production hub in the frontier deep offshore waters of the West of Shetland, Total is also improving the United Kingdom's long-term energy security. This subsea-to-shore development is the first of its kind in the country and will provide the domestic market with 8% of its daily gas requirements while enabling the potential for further developments in the West of Shetland area."

This vast project comes as the gas and oil industry is going through a difficult period due to collapsed prices. Delayed investments, cuts in spending and divestitures of assets have led to 5,500 jobs being slashed in the North Sea oil sector alone.

By James Burgess of Oilprice.com

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