Statoil acquires UK gas storage development rights

By OGJ editors

HOUSTON, Dec. 9 -- Statoil has acquired the development rights for an underground natural gas storage facility to be built at Aldbrough, near the Hornsea salt caverns on the east coast of England.

The acquisition follows an agreement to buy all of the shares in Aldbrough Gas Storage Co. Ltd. from Intergen, the electric power alliance of Royal Dutch/Shell Group and US engineering company Bechtel Corp.

The new facility, which is scheduled to be operational in 2007, will act as a buffer against possible terminal interruptions, and will provide additional security of supply for Statoil's gas deliveries to the UK.

In addition, the facility's rapid injection and withdrawal capability will support the group's UK gas trading activities.

The facility will consist of three underground salt caverns having a total storage capacity of 170-230 million cu m of gas. Drawdown will be via an 8 km gas pipeline that will be tied into Britain's national transmission system. Other necessary construction will be a power line connecting to the Yorkshire Electricity distribution network and a seawater leaching system for leaching out the salt domes.

"This facility will provide us with a back-up for our gas deliveries from the Norwegian continental shelf," said Mike Kelly, vice-president and project director at Statoil UK. "It also gives us a useful trading tool to enhance the value of our gas portfolio," he added.

Gas currently is supplied to the UK via the Vesterled trunkline from the Heimdal platform in the North Sea and the Frigg pipeline to the St Fergus terminal in Scotland.

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