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New feedstock deal with Borealis

March 7, 2005, 09:15 CET

A 10-year contract has been secured by Statoil from the Borealis petrochemicals group for the delivery of liquefied petroleum gases (LPG) from Snøhvit to the Rafnes complex south of Oslo.

Signed on 3 March, the deal covers the supply of about 150,000 tonnes of LPG mix (propane and butane) per annum from the Barents Sea field.

This volume will be shipped in refrigerated form from the processing facility at Melkøya in northern Norway to the Noretyl ethylene plant.

Owned 50-50 by Hydro and Borealis, this unit is currently being expanded and will be operational later in the year.

“The deal strengthens us as a long-term supplier of feedstock from the Norwegian continental shelf for petrochemicals production in Norway,” says Thor Inge Willumsen, Statoil’s senior vice president for oil sales, trading and supply.

“We’re very pleased to be able to conclude such a long-term contract with an important customer.”

“This is a very good example of an excellent collaboration between an oil and gas producer and a petrochemicals company,” comments Staffan Lennstrom, executive vice president for olefins at Borealis.

“Both of us win – Statoil sells LPG from Snøhvit and we secure feedstock which gives our olefin production a competitive advantage.”

Statoil is already a substantial supplier of feedstock to Borealis plants in Norway.

It has delivered ethane for several years from the Kårstø processing plant north of Stavanger and LPG from the Vestprosess facility at Mongstad near Bergen.

These deliveries are also made under long-term agreements, which help to provide Noretyl with secure feedstock supplies over many years.

The Kårstø plant is currently being expanded in order to process gas from Statoil’s Kristin development in the Norwegian Sea, starting on 1 October.

This project will also increase ethane production capacity by more than 50 per cent from the same date, which means higher deliveries to Rafnes.