Gas transport agreement

October 3, 2003, 09:50 CEST

The British and Norwegian authorities have reached agreement on the most important principles for a new treaty between the two nations. The accord is partly intended to establish the framework for additional pipelines running from the Norwegian continental shelf to the UK.

The British and Norwegian authorities have reached agreement on a new treaty which provides the framework for laying new pipelines from the NCS to the UK. (Illustration: Thor Oliversen)

“We need the assurance of this agreement before we can begin to invest in a new pipeline,” explains Øyvind Kirkhus, head of new infrastructure at Statoil’s Natural Gas business area.

Norway’s Ministry of Petroleum and Energy and the UK Department of Trade and Industry are due to incorporate the agreed principles in a treaty within the next year.

The Ormen Lange gas field licensees in the Norwegian Sea and ConocoPhillips plan to invest almost NOK 20 billion in the 1,200-kilometre Britpipe trunkline.

This project includes a tie-in to Statoil’s Sleipner fields in the North Sea as well as land-based facilities in north-eastern England.

A plan for installation and operation of Britpipe is due in November, and the facility could be ready in the autumn of 2006. Ormen Lange is scheduled to start producing a year later.

“This pipeline will give us opportunities to become a substantial supplier of gas to Britain,” Mr Kirkhus observes.

The UK gas market is the biggest in Europe, consuming 110 billion cubic metres per year, and Britpipe will allow some 20 billion cubic metres to be supplied annually from Norway.

This capacity comes on top of roughly 12 billion annual cubic metres through the Vesterled pipeline, which runs from Heimdal via the Frigg Transport system to St Fergus in Scotland.

Statoil and the state’s direct financial interest (SDFI) will own almost half of the total capacity.

Norsk Hydro is development operator for Ormen Lange and its transport system, while Statoil has responsibility for planning and constructing a pipeline in cooperation with Hydro.

The latter will be laid from the planned export terminal at Nyhamn in mid-Norway, via the Sleipner fields, to Easington on the English coast.