Aberdeen-based oil and gas services giant Wood Group said it commenced a multi-million dollar contract to act as operating partner of the Scottish Area Gas Evacuation (SAGE) system and Beryl pipeline on behalf of Ancala Midstream.

Wood said it will manage the day-to-day operation of the SAGE system, which transports gas through the 323 kilometre SAGE pipeline between the northern part of the Central North Sea to the SAGE terminal at St Fergus, north of Aberdeen, where it is processed on behalf of North Sea gas producers.

The contract follows Ancala Midstream’s acquisition of Apache North Sea’s interest in the assets.

The contract news came amid a report in the Financial Times that Wood is bracing for a showdown with its shareholders over a proposed 25% pay increase for its chief executive Robin Watson.

According to the report, Watson could see his base salary rise from £600,000 to £750,000, increasing his total potential package including bonuses to £3.5 million.

Watson said: “We are delighted to be working with Ancala Midstream on these major pieces of infrastructure.

“This contract strengthens our operating partner portfolio in the UKCS and our commitment is to leverage our broad capabilities, differentiated expertise and innovative solutions to deliver safely and efficiently.

“We have established a close partnership with Ancala Midstream, using our four decades of North Sea experience to support the smooth and successful transition of asset ownership and operatorship, and we welcome the St Fergus-based team to Wood today.”

Wood is also operating partner for the Central Area Transmission System (also known as CATS) under an up to 10 year, $250 million contract, awarded in 2015 by CATS Management Limited, a wholly owned subsidiary of Antin Infrastructure Partners.