UPDATE - El Paso, Iberdrola in Arctic gas deal
Date: 19-Oct-01
Country: NORWAY
Author: Jeff Coelho
El Paso will buy 2.4 billion cubic metres (bcm) of gas per year, while Iberdrola will purchase 1.6 bcm for a total value of around 4.0 billion Norwegian crowns ($453.8 million) per year, based on an average price of 1.0 crown per cubic metre.
The Snoehvit consortium, led by Statoil as the operator, will also sell volumes totalling 1.7 bcm to partners Gaz de France and TotalFinaElf .
"We are very pleased with these deals as they bring us into two LNG markets which both have a potential for growth," Trude Maaseide, a Statoil spokeswoman told Reuters.
Snoehvit, estimated to hold 320 billion bcm of gas at a total value of 125 billion crowns, will be developed as a subsea tie-back to onshore production facilities with a LNG plant near the world's northernmost city Hammerfest.
The liquified gas will be transported from Finnmark by specialised LNG carriers to buyers in the U.S. and Europe.
In the U.S., the Snoehvit gas would be priced according to the prevailing spot price, while the price of gas to Europe would be comparable to alternative energy products, Statoil said.
NEW NORWAY GOVT THREAT
The deals were signed under a pre-condition that the Norwegian parliament and relevant authorities approved the Snoehvit project.
Norway's new centre-right coalition, set to take over the government on Friday, may postpone Snoehvit in order to make further environmental impact studies of the project.
Environmentalists are opposed to Snoehvit, the first development in the Arctic Barents Sea, because of the project's potential harm to the region's fragile ecological system.
Maaseide said the signals from the new government could be a setback but hoped that a quick solution would be found in time for the corsortium's plans to start building by spring 2002.
"There is a small timeframe of about two months which we hope that we will be able to uphold," she said.
Snoehvit was expected to come onstream by autumn 2006.
Operator Statoil holds a 22.29 percent stake in Snoehvit, while the Norwegian state holds 30 percent, Norsk Hydro 10 percent, TotalFinaElf 18.40 percent, Gaz de France 12 percent, Amerada Hess 3.26 percent, RWE-DEA 2.81 and Svenska Petroleum 1.24 percent.