Snøhvit LNG contract for Linde

December 8, 2000, 12:00 CET

A NOK 65 million preliminary engineering contract for a gas liquefaction plant has been awarded by Statoil to Germany's Linde.

Work will start immediately in Munich on the land-based plant, which is due to produce liquefied natural gas (LNG) from the group's planned Snøhvit project in the Barents Sea off northern Norway.

Running initially until next summer, the contract includes two options for Linde to do further work up to the completion of a possible facility in the autumn of 2006.

Plans call for the liquefaction plant to be located at Melkøya near Hammerfest to handle gas piped in from Snøhvit and its neighbouring Askeladden and Albatross fields.

The LNG would then be shipped to customers in specially-constructed vessels.

Plans for development and operation of the field and construction and operation of the pipeline are due to be submitted to the authorities next summer – providing sales contracts have been secured for the LNG.

The project must also be approved by the other licensees, while emission permits and tax rules need to be clarified.

Negotiations with potential LNG buyers are now entering their final phase, and agreements are due to be in place before next summer.

Snøhvit would be the first development in Norway's sector of the Barents Sea.