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Ormen Lange gas to be exported via Sleipner

By OGJ editors
HOUSTON, Dec. 23 -- Field licensees for Ormen Lange field on deepwater Block 6305/5-1 in the Norwegian Sea agreed Dec. 18 to develop the field using subsea production installations linked to a new onshore natural gas processing plant at Nyhamna, near Aukra, in Møre county, which is down the coast from Statoil ASA's existing Tjeldbergodden complex in mid-Norway.

Ormen Lange is the largest undeveloped natural gas development on the Norwegian Continental Shelf, development operator Norsk Hydro AS reported. The field is 100 km off Møre and Romsdal counties, Norway, in 800-1,000 m of water. Estimated gas reserves are 375 billion cu m of dry gas and 138 million bbl of condensate.

Development will require construction of the "largest pipeline on the Norwegian Continental Shelf," Norsk Hydro said. The gas will be exported from Statoil's existing Sleipner R riser platform in Sleipner East field in the North Sea, which is tied via existing pipeline to continental Europe.

Total cost for offshore development and the gas trunkline from the treatment plant to Sleipner East is about 55 billion kroner.

The decision, supported by all partners, is based on an overall assessment of environmental, technical, safety, social, and economic issues following nearly 3 years of studies. The group plans to submit a formal plan for development and operation to the Norwegian authorities in October 2003.

The Ormen Lange partners see opportunities for sales to the growing UK market, and they are likely to make a decision on this option in first quarter 2003.

"(Exporting) via Sleipner East will strengthen this field as a gas hub," says Alv Bjørn Solheim, vice-president, business development, in the Troll-Sleipner complex. "That gives us the flexibility to reach customers in continental Europe or the UK and will have positive spin-offs for the field over many years to come."

Also being considered is storage in the Sleipner area to cope with seasonal variations in demand, which would make the field important as a swing producer.

First gas from Ormen Lange is planned for October 2007, based on the formal development plans being submitted in 2003 and construction starting in 2004. The field is expected to produce for 30-40 years. During peak production, the field is expected to produce a minimum of 20 billion cu m/year, about 20% of total anticipated Norwegian gas production in 2010.

Participants in the Ormen Lange license are Norsk Hydro 17.956% (development phase operator), AS Norske Shell 17.2% (operator in the operations phase), Petoro AS (formerly the state holdings group SDFI) 36%, Statoil 10.774%, Esso Norge AS 7.182%, and BP PLC unit BP Amoco Norge AS 10.888%.

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