Selling gas to Grane

September 26, 2000, 11:30 CEST

A total of 11 billion cubic metres of Norwegian gas is being sold to Norsk Hydro's Grane project in the North Sea to improve oil recovery.

Agreed by Norway's Gas Negotiating Committee (GFU), this deal will make two billion cubic metres available annually to the field licensees.

Deliveries are set to begin in April 2004, which will coincide with the planned start to production from the field.

According to Johan Tårup, Statoil's chief negotiator for the GFU, the Grane sale is the largest agreed by the committee so far this year.

The Grane licence needs another seven billion cubic metres of gas, but wants to place a possible supplementary order later.

Recoverable reserves in the field are put at just over 704 million barrels of crude, making it roughly twice the size of Statoil's Veslefrikk development.

The gas will be delivered to Hydro's Heimdal platform, 50 kilometres north-west of Grane, and the buyer will lay a line to link the two.

No decision has yet been taken by Norway's Gas Supply Committee (FU) on which field is to supply these deliveries, but that will be determined in good time before Grane comes on stream.

This is the first time the GFU has sold gas for injection in an oil field. According to Mr Tårup, such sales could be a future commercial opportunity on the Norwegian continental shelf.

Using gas to drive more oil out of a field is not uncommon in these waters. The Troll licence has sold gas to Hydro's Oseberg field, for instance, and many fields use their own associated gas for injection.