DNeX unit receives 'no objection' on development concept for Avalon project

KUALA LUMPUR: Dagang Nexchange Bhd's (DNeX) 90%-owned subsidiary Ping Petroleum Ltd has received a letter of "no objection" from the North Sea Transition Authority in relation to its proposed development concept for the Avalon discovery in the Central North Sea, UK.

In a statement, the group said the company will now finalise conceptual development planning and begin front-end engineering works in preparation to submit the Avalon Field Development Plan, with the final investment decision anticipated for later this year.

With a total estimated recovery of 23 million barrels of oil, production from Ping’s second oilfield asset is scheduled to begin between mid 2024 and mid 2025, subject to availability of

key materials and equipment.

DNeX group managing director Tan Sri Syed Zainal Abidin Syed Mohamed Tahir said the "no objection" letter represents a material opportunity to expand and diverisfy Ping's portfolio of oil assets in full accordance with the UK's production and emissions-reduction targets.

He said the concept comprises tie-back of Avalon production wells to a re-used Floating Production Storage and Offloading facility (FPSO), which has spare ullage to provide an offtake route for nearby stranded discoveries.

He added that discussions are ongoing with the UK regulator and supply chain to decarbonise the development through integration with Floating Offshore Wind.

“The next step for Ping is to submit the company’s field development plan for Avalon to NSTA by the next quarter. Once approval is attained, the company will proceed with the full

development programme” he added.

He said the Avalon field is planned to produce at initial rates of 20, 000 barrels of oil per day, providing a material increase in production and diversifying the asset base.