Statoil positions itself within LNG

August 24, 2006, 16:15 CEST

The Snøhvit development in the Barents Sea and the Cove Point terminal on the east coast of the USA are the mainstay of Statoil’s LNG strategy.

”Statoil is gaining important positions within liquefied natural gas (LNG), which is the fastest growing gas market in the world.”

The statement was made by Irene Rummelhoff (front-page picture), senior vice president for the international gas cluster in the Natural Gas business area, at the LNG forum during the Offshore Northern Seas exhibition and conference on 24 August.

Ms Rummelhoff points out that the Snøhvit facilities will be the first LNG producer in Europe. Statoil also aims to find new gas resources in the Barents Sea in order to increase the capacity of the onshore Hammerfest LNG plant.

The Cove Point terminal is located in the state of Maryland.

Parts of the Snøhvit gas will be exported to the USA and US authorities have approved a twofold increase in the receiving capacity at Cove Point. From 2009 Statoil will supply the biggest gas market in the world with 10 billion cubic-metres of gas. The US east coast has few LNG terminals. Cove Point thus represents a great opportunity for Statoil to position itself in the most attractive part of the US gas market. Consequently Statoil has gained important positions both within LNG production and on the market side.

According to MS Rummelhoff LNG will also be an important contributor to Statoil’s ambitions to produce 50 billion cubic-metres of gas by 2015.

Statoil believes that LNG will become a considerable element in the group’s marketing strategy. The global gas market is growing, and thanks to LNG technology the markets can be supplied with gas that will not be available as pipeline gas. The Snøhvit development is a first step for Statoil in the development of the gas resources in the far north.

The Snøhvit technology and experience are important elements of Statoil’s efforts to join field development projects in the Russian sector of the Barents Sea.

Ms Rummelhoff emphasises that LNG gives increased flexibility for the gas producers as the volumes may be sent to different markets. The LNG spot market is also growing, which makes gas a global commodity.