Marathon Oil, the fourth largest US oil company, will provide natural-gas processing and transportation to Ramco Energy, a UK oil producer that is developing a field in Ireland's Celtic Sea.
Marathon will boost the capacity of its offshore Kinsale Head processing facility by twenty seven percent to 280 million cubic feet a day to handle gas from the Seven Heads project, led by Ramco.
As part of the agreement, Ramco and that its partners will pay some costs to run Kinsale, Marathon said in a statement distributed by the PR Newswire.
Seven Heads, located about 85 kilometers off the southern coast of Ireland, will produce about 60 million cubic feet a gas a day when it goes into operation next year. Output might rise to a hundred million cubic feet a day under the processing contract, the Houston-based Marathon said.
Demand for gas in Ireland, which is used for electricity generation and home heating, has increased as the economy has improved over the past few years. Seven Heads holds an estimated three hundred billion cubic feet of the fuel.
Ramco said in a separate statement that it agreed to buy the US utility owner Duke Energy's twenty six percent stake in the project for seven and a half million dollars and for as much as another three million dollars based on the production levels achieved in the field.
Ramco also bought Northern Petroleum's Northern Exploration unit, which has a four percent stake in Seven Heads and an interest in a nearby project, for 2 million pounds ($3.05 million) in cash and a million pounds in stock.
When the transactions are completed Ramco will own 86.5 percent of Seven Heads. Closely held Island Petroleum Development Ltd. will an eighth and Sunningdale Oils Ireland will own the remainder.
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