The licensees of the Snøhvit field offshore Norway in the Barents Sea have signed separate contracts for the sale of liquefied natural gas (LNG) corresponding to the design capacity of the LNG plant that will be built in the northern Norwegian county of Finnmark.
The sales agreements cover a period of 17 to 20 years from the planned production start in 2006. Norsk Hydro has sales agreements with the US-based El Paso Global LNG Company and Spain's Iberdrola S.A covering annual deliveries corresponding to 500 million cubic meters of natural gas (10,000 barrels per day of oil equivalent).
Field operator Statoil, Germany's RWE-DEA, US-based Amerada Hess and Sweden's Svenska Petroleum have signed separate contracts with the same buyers corresponding to the share each company has in Snøhvit. Gaz de France and TotalFinaElf will lift their own gas from the field.
In the US, the gas from Snøhvit will be priced according to the prevailing posted price. The price of the gas delivered to Europe will be comparable to alternative energy products.
A pre-condition for the agreements is that the Snøhvit development project be approved by the relevant authorities on conditions consistent with the Snøhvit group's development application.
Hydro's share of Snøhvit is 10 percent.