Possible landing site chosen for the Ormen Lange gas

March 14, 2002, 00:00 CET

If the future Ormen Lange gas field's production is to be transported directly to a nearby onshore facility, Nyhamn in Aukra municipality is deemed the most suitable landing site. To date, an offshore processing platform with direct gas export to market is the preferred solution.

Nyhamn will be fully evaluated against the preferred offshore development by late 2002. The Nyhamn landing site will be further developed as part of the onshore development concept for bringing the gas ashore. It will be evaluated against a complete offshore concept with direct export of gas to the European market.

Relative to a complete offshore scenario, the onshore alternative produces a significant capital gap. For the time being, the offshore concept seems NOK 5-8 billion less expensive than an onshore development. Updated estimates based on updated concept information will be developed towards concept selection in late 2002.

Ormen Lange is the largest gas field under development on the Norwegian Continental Shelf. The field is located 100 km off the coast of Møre, and possesses an estimated 400 billion m3 (bcm) gas reserves. The annual production rate is set at between 15-20 bcm per year, a magnitude of energy equivalent to cover all Norway's current demand.

Production start for Ormen Lange is set for October 2007. Application accompanied by a Plan for Development and Operation (PDO) will be delivered to the authorities in December 2003. The Project is now in the concept selection phase where two key concepts are investigated:

  • A full processing platform with direct gas export to the market
  • Production facility at sea in combination with an onshore facility for processing and gas export to the market

The decision whether to develop Ormen Lange as an offshore platform, or in combination with an onshore facility, is to be taken in December 2002.

The identification of Nyhamn as the possible landing site is based on extensive analyses that have been in progress since spring 2000. Close cooperation was established between the Ormen Lange Project, municipalities involved and Møre and Romsdal County regarding the analysis processes and the site selection criteria. In addition to the evaluation of the economic aspects, the work is based on impact assessment studies within the areas of macro/socio economic interests, health, safety and environment, all performed by independent and leading consultant companies within each of the competence areas. Nyhamn is primarily being evaluated to cover the processing needs for a stand-alone Ormen Lange Development, but also assessed regarding the possibilities of becoming a future hub for other fields.

During planning/pre-engineering of processing equipment and integration synergies as the basis for investment estimates, two different processing layout concepts have been considered for part of the Tjeldbergodden processing plant. Regarding these assessments, now after the selection of the possible site, it still remains to verify identified savings from synergy effects. The review work will be completed by May 1, 2002.

The focus for further evaluations is to optimize both the offshore and onshore concepts, with the goal of identifying the key differences regarding value creation, costs, social considerations, health, safety and environment.

Participants in Ormen Lange:

Norsk Hydro Produksjon a.s - 18% (Operator development phase)

A/S Norske Shell - 17% (Operator production phase)

Petoro AS - 36%

BP Norge AS - 11%

Statoil ASA - 11%

ExxonMobil - 7%