Split on gas supply

August 31, 2000, 17:00 CEST

No agreement has been reached by Norway's Gas Supply Committee (FU) on allocating Statoil's Mikkel field to a sales contract.

The committee was split over this Norwegian Sea discovery when it reported to the Ministry of Petroleum and Energy today, 31 August.

Covering fields which need to be developed now to ensure optimum recovery, these recommendations are likely to be considered by the authorities during September.

Agip, BP, Conoco, Enterprise, Fortum and TotalFinaElf believe that Mikkel is not "time critical" and has no immediate need for allocation – and thereby development.

In their view, this field will be a relevant candidate for allocation to a gas sales contract next spring.

Statoil, Norsk Hydro and ExxonMobil argue for their part that Mikkel should be allocated to a contract and brought on stream in 2003.

They maintain that it is the only candidate sufficiently mature to utilise spare capacity in the existing infrastructure from that year.

That includes available space in the Åsgard Transport trunkline to Statoil's Kårstø gas treatment plant north of Stavanger.

Phasing Mikkel in at an early date would also enhance flexibility in concluding new Norwegian gas sales contracts, the proponents argue.

"A higher volume of gas flowing to Kårstø would lay the basis for increased value creation by optimising the various treatment facilities," says Elisabeth Aarrestad, who heads the FU secretariat.

"And an early Mikkel allocation is important for ensuring sufficient time to plan enhanced liquid and ethane separation, and opportunities for removing carbon dioxide."

A unanimous committee has recommended that Hydro's Vale field should be allocated to a contract from 2001 through a cooperation with Oseberg in the North Sea.

The FU intends to assess gas disposal for ExxonMobil's Balder/Ringhorne fields in the Frigg area of the North Sea once details have been received about a possible gas injection contract for Grane south-east of Balder.