New North Sea Shearwater pipeline announced by Shell Published duration 10 December 2018

image caption The gas is coming from the Shearwater platform

A new pipeline to help take gas from Shell's Shearwater platform to the St Fergus plant in Aberdeenshire has been announced.

The 23-mile (37km) link will join Shearwater, 140 miles (225km) east of Aberdeen, with the Fulmar Gas Line.

Shell said the move - part of the creation of a gas infrastructure hub in the central North Sea - would reduce costs.

The hub is expected to produce as much as 400 million cubic feet of gas a day.

Analysis by BBC Scotland business and economy editor Douglas Fraser

image copyright Getty Images

FIDs - or Final Investment Decisions - are the key moment when the big money begins to flow.

There have been 14 of them in the UK offshore oil and gas sector this year. Shell can claim to be part of seven.

With a budget reckoned to be some way north of £100m, this latest FID shows the big UK/Dutch oil major is up for commitment to mature assets, particularly in the Grabben area of the central North Sea, due east of Aberdeen.

Other such assets are being sold on to specialists in extraction from smaller and mature fields.

By laying the seabed pipeline, the project redirects gas from the East Anglia coast to St Fergus, north of Peterhead, and opens up the possibility of splitting wet gas (mixed up with oily liquid) at the Mossmorran plant in Fife.

There's no such opportunity in England, so the switch to the Aberdeenshire landfall adds value and makes this commercially attractive.

By doing that, other options are opened up in the area - if pipelines are subsequently linked into the Jackdaw field for instance.

Behind this appears to be the Oil and Gas Authority, the new-ish regulator based in Aberdeen, and given the task of ensuring maximum recovery from the North Sea.

Getting operators to keep investing in the pipeline network is a vital way of ensuring smaller deposits don't get stranded and rendered uneconomic.

Steve Phimister, Shell's vice president for upstream in the UK, said: "This is part of our strategy to grow our gas production from around the Shearwater platform and it underscores Shell's commitment to maximising the economic recovery of oil and gas from the North Sea.

"Through close collaboration with our partners and suppliers, we have been able to reduce costs, simplify the production process and create an important production hub at Shearwater.