Concession for power station awarded

July 5, 2006, 01:30 CEST

Statoil has been awarded a concession for constructing a combined heat and power (CHP) station at the group's Mongstad refinery north of Bergen. The group's application for an emission permit is yet to be approved.

The Norwegian Water Resources and Energy Administration (NVE) has granted Statoil a concession to construct a combined heat and power station at the Mongstad refinery and a 61-kilometre gas pipeline from Kollsnes to Mongstad. The gas pipeline will supply the power station with natural gas from the Troll field in the North Sea. The power station is part of the Mongstad refinery upgrade.

The power station construction is subject to the granting of an emission permit by the State Pollution Control Authority (SFT). Egil Sæl, vice president for business development and technology of the Manufacturing & Marketing (F&M) business area, believes that an emission permit will be granted shortly.

"We have to receive a permit before the project can be presented for a final decision on implementation by the group. It will take a good three years from then before the plant comes on stream," Mr Sæl says.

NVE believes the social advantages of a power station are considerable, including improved energy efficiency, direct and indirect use of power and heat by industry and higher energy efficiency at the refinery. NVE also points out that the power station is in agreement with the European Union (EU) guidelines.

"We are pleased to receive the licence, and particularly to note that NVE emphasises the many positive aspects of the project," Mr Sæl says. "It will contribute to a much higher energy efficiency, starting at a rate of around 70 per cent."

NVE has not set any requirements for cleaning of carbon dioxide. However, the station must be prepared for future handling of carbon dioxide.

The power station will have the capacity to produce 280 megawatts of electricity and will supply 350 megawatts of heat to the refinery. Annual electricity production is estimated at 2.3 terawatt-hours.

The Danish energy company Elsam has been given the contract to construct, own and operate the power station. Statoil will be responsible for reconstruction of the refinery. The licensees of the Troll field will own the gas pipeline between Kollsnes and Mongstad. Investments will total around NOK four billion.