Power firm SSE has taken a major stake in four highly prospective Scottish gas fields after agreeing a deal worth more than half a billion pounds.
The firm is acquiring a 20% stake in the Total E&P UK-operated Greater Laggan field west of Shetland.
SSE is also taking a 20% interest in the Shetland Gas Plant, which will handle production from the Glenlivet, Edradour, Laggan and Tormore fields.
Chief executive Alastair Phillips-Davies said the deal allowed SSE to increase its upstream gas presence at a fair price.
“Following extensive due diligence, we have agreed to acquire a series of very good assets and entered into a partnership with one of the world’s leading gas and oil companies,” he 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.”
French-headquartered Total will continue to hold a 60% stake in Greater Laggan once the SSE farm-in is complete, with Dong Energy being the third joint venturer with a 20% holding.
SSE said it was paying Total E&P UK £565 million upfront for its stake.
The purchase will be financed by a bond issue and from the proceeds of certain asset sales. The firm will also invest a further £350m over the next three years to bring the field development to a conclusion.
Greater Laggan is expected to produce first gas in the current financial year and will reach peak production of five million therms of gas daily in 2016.
“The sale of these minority interests is aligned with Total’s portfolio management strategy and target of divesting $5 billion of assets in 2015,” Arnaud Breuillac, Total’s E&P president, said.
“It allows us to capitalize fully on this new deep offshore development, while retaining a majority interest and operatorship.
“With the upcoming start-up of Laggan, followed by Tormore, Edradour and Glenlivet in the coming years, Total is opening up a new frontier area for gas production in the United Kingdom.”