Statoil Taps Gas from Arctic Field, LNG in Sept
Date: 22-Aug-07
Country: NORWAY
Author: Wojciech Moskwa
Snoehvit, one of Statoil's biggest development projects, will tap gas from the Barents Sea in the Arctic and turn it into LNG for export to the United States or elsewhere.
The nearly $10 billion project will from next year produce 5.7 billion standard cubic metres of natural gas, condensed into about 70 LNG tankers that will each year leave the Arctic port of Hammerfest on Norway's northern tip.
"The valve from the Snoehvit field is opened," Statoil spokesman Sverre Kojedal said. "After this milestone we begun our last phase of preparations ... (and) in 3-4 weeks plan to start LNG production."
It is not yet clear if the first LNG cargo vessel, due to leave Hammerfest in late September, will take the gas to the United States, to another European country or elsewhere.
"This is an important day after many years' work and preparation," said Geir Pettersen, Statoil senior vice president for the Snoehvit project. "We now have some hectic weeks ahead of us adjusting the process plant to produce LNG."
Snoehvit has 193 billion cubic metres of natural gas in recoverable reserves. Statoil chose to tap the gas with remotely-operated subsea installations, not traditional platforms that could be unstable in harsh Arctic conditions.
The gas will then be piped by an undersea pipeline to the onshore processing plant and liquefied for easy shipping to markets around the world.
ARCTIC LITMUS TEST
Up to a quarter of the world's undiscovered oil and gas reserves may be in the Arctic, making Snoehvit a litmus test for much of the technology needed for other projects such as developing Gazprom's giant Shtokman field in the Russian part of the Barents Sea.
"Snoehvit is a kind of a pilot project for LNG in the Arctic," said Anne Gjoeen, analyst at Kaupthing in Oslo.
"Statoil has gained much experience during the project, especially in subsea development ... which in the best case could be used in Shtokman too."
Statoil is the operator of Snoehvit with a 33.53 percent stake in the licence. Statoil shares were down 1.4 percent to 159.75 crowns at 1041 GMT, while the Dow Jones Stoxx oil and gas index was off 0.7 percent.
The other owners are Norwegian state-owned Petoro with 30 percent, France's Total SA with 18.4, Gaz de France with 12 percent, US company Hess with 3.26 percent and Germany's RWE Dea with 2.81 percent.
Norway's biggest offshore project, the Ormen Lange gas field in the Norwegian Sea, also passed a milestone this weekend with its onshore gas processing plant going "hot" after receiving gas for testing from another Norwegian field.
Ormen Lange, Norway's second largest field with nearly 400 million standard cubic metres of oil equivalent -- twice as much as Snoehvit -- is set to begin production on schedule in October, development phase operator Norsk Hydro said.
