Venture to build 70 mln stg North Sea oil pipeline

LONDON, Nov 2 (Reuters) British oil and gas firm Venture Production Plc said on Thursday it planned to build and operate a new 33-kilometre pipeline in the North Sea to export oil from its fields in the Greater Kittiwake Area (GKA).

The firm estimates the total construction cost of the pipeline to be between 65 million pounds (4 million) and 70 million pounds, with an expected start-up date in late 2007.

At present, oil from four fields in the GKA is exported via a tanker from the Venture-operated Kittiwake platform.

The Aberdeen, Scotland-based firm said the new 10-inch pipeline would provide a fixed link between the platform and the existing Forties Pipeline System.

''Venture is planning to lay the pipeline from the Kittiwake platform to the BP-owned Forties Unity platform where it will be tied in to the FPS which will then transport the oil to market'' it said.

Venture bought a 50 percent stake in the GKA from Royal Dutch Shell and Exxon Mobil in Nov. 2003.

British oil firm Dana Petroleum owns the remaining 50 percent interest.

Since then Venture and Dana said they have invested 170 million pounds in redeveloping the existing Kittiwake and Mallard fields and bringing new discoveries onstream.

''Switching from a tanker to a pipeline export method will increase average production and reduce operating costs -- production is periodically shut down whilst the tanker offloads or during adverse weather conditions,'' Bridgewell analyst Nathan Piper said in a note.

''Construction ... is a positive step forward, highlighting Venture's confidence in the long term potential in the GKA,'' he added.

Venture shares were up 0.2 percent at 804 pence by 0815 GMT, valuing the business at more than 1 billion pounds.

REUTERS DKS DS1508