Partners agree Snøhvit development

September 25, 2001, 01:30 CEST

The partnership in the Statoil-operated Snøhvit unit in the Norwegian Barents Sea decided today, 25 September, to submit a plan for development and operation (PDO) to the authorities.

A plan for installation and operation of an associated gas liquefaction plant on land in northern Norway was also approved for submission.

Snøhvit will be the first development in the Barents Sea, and also ranks as the first large-scale project in Europe producing liquefied natural gas (LNG). The project will be developed stepwise at an estimated cost of NOK 46 billion in current money.

“Snøhvit will be the largest industrial project ever in northern Norway,” says Henrik Carlsen, executive vice president for Statoil’s Exploration & Production Norway business area.

Expected to provide extensive spin-offs for the region, the development embraces field installations, pipelines, receiving facilities and a gas liquefaction plant at Melkøya near Hammerfest.

Four large specialised LNG carriers will be built to transport the LNG between Melkøya and terminals in the USA and southern Europe.

Work is due to begin in the spring of 2002, with the installations coming on stream in 2006. Operation will continue until roughly 2030.

During the peak construction period, the equivalent of 1,200 full-time workers will be needed at Melkøya. Operating the facility will create some 180 permanent jobs in the Hammerfest area.

The Snøhvit partners have negotiated contracts on an individual basis to deliver a total of 5.6 billion cubic metres of LNG annually to US and south European markets.

These sales agreements and contracts for the LNG vessels are due to be signed in October. The names of the gas buyers, shipowners and shipyards will be announced at the same time.

The plans now being submitted embrace the development of gas and condensate (light oil) deposits in the Snøhvit area, about 130 kilometres from the western coast of Finnmark county.

The Snøhvit, Askeladd and Albatross deposits will be produced by subsea installations operated from Melkøya, and none of the offshore installations will be visible on the surface.

Snøhvit is the first subsea development in which all field functions will be remotely operated from a facility onshore.

A total of 21 production wells and one carbon dioxide injection well are due to be drilled. The wellstream will be piped to shore through a 160-kilometre line – the longest multiphase transport in any Norwegian offshore development.

Condensate and liquefied petroleum gas (LPG) are removed from the wellstream on Melkøya and exported as separate products.

The natural gas is further cooled down to –163°C, when it liquefies. This LNG will be transported to market in vessels specially constructed for the low temperature.

Technological choices are based on best available technology. Carbon dioxide produced with the gas will be separated, piped offshore in a separate line and injected into a sub-surface reservoir.

The Barents Sea is an important area for Norwegian fish stocks, and optimal consideration will be paid to the fishing industry in the development. All seabed installations can be overtrawled.

Statoil has a 22.29 per cent interest in Snøhvit, while the state’s direct interest is 30 per cent. The other licensees are TotalFinaElf with 18.4 per cent, Gaz de France with 12 per cent, Norsk Hydro with 10 per cent, Amerada Hess with 3.26 per cent, RWE-DEA with 2.81 per cent and Svenska Petroleum with 1.24 per cent.

The project requires approval by the Norwegian Storting (parliament).

Further information from:

Kristofer Hetland +47 51 99 47 00 (office), +47 90 50 19 37 (mobile)

Sverre Kojedal +47 77 04 55 11 (office), +47 91 60 21 90 (mobile)