Lack of sufficient gas discoveries halt Snohvit expansion plans

Norwegian producer Statoil ASA and its partners have cited lack of sufficient natural gas discoveries in the Snohvit license area in the Barents Sea as the main reason for the decision to halt any plans to expand the project. Statoil stated Oct. 2 that the partners will instead focus on optimizing and upgrading the existing single-train, 4.3 million tonne/year gas liquefaction facility on Melkoya off Hammerfest.

“The license has not determined whether LNG or a pipeline solution is the best concept for a potential capacity increase at a future date,” said Statoil, the project’s operator.

“Over the last 18 months, the Snohvit license partners have carried out studies for the expansion of the gas export capacity from Melkoya. The increased capacity would enable the accelerated gas production of increased reserves in the Snohvit license, together with existing discoveries in the area,” Statoil said.

Statoil noted that Snohvit license partners have “devoted considerable resources to finding solutions that could make a capacity expansion profitable.” These have included thorough studies for either a second LNG train or a dew-point facility and pipeline—the latter solution studied in collaboration with Gassco.

“The possibility of producing increased reserves in existing trains has been an alternative throughout the process, in addition to the two concepts for capacity increase. With new gas discoveries increased capacity may again be considered,” Statoil said.

The Snohvit LNG project was built to exploit the gas resources from three Barents Sea fields: Snohvit, Albatross, and Askeladd. “There will be major investments associated with Phases 2–4, which include the development of Askeladd and a future compression solution,” according to Oystein Michelsen, Statoil executive vice-president for development and production, Norway.

In total, the installation of five new subsea templates and a total of 12 production wells are planned, he said.

Project partners are operator Statoil 36.79%, Petoro 30%, Total E&P Norge 18.4%, GDF Suez E&P Norge 12%, and RWE Dea Norge 2.81%.

Contact Steven Poruban at stevenp@ogjonline.com.

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