By the OGJ Online Staff
HOUSTON, Oct. 18 -- El Paso Global LNG, a subsidiary of El Paso Corp., Houston, has agreed to buy 2.4 billion cu m/year of liquefied natural gas for 17 years from the Statoil ASA-led Snøhvit project in the Barents Sea off Norway.
The Snøhvit LNG will be received at El Paso's Cove Point, Md., terminal. El Paso plans to reopen and expand that facility, increasing storage capacity to 7.8 bcf from 5 bcf.
The US Federal Energy Regulatory Commission recently authorized the reactivation of the terminal and an interconnection with the Transco pipeline system (OGJ Online, Oct. 12, 2001).
El Paso is maneuvering for a strong position in LNG imports into the US and worldwide. It reportedly is negotiating with Pertamina for gas from its proposed Tangguh plant in Irian Jaya province, and is looking to acquire or build two more LNG terminals, including one in Baja California to take gas from an Australian project (OGJ Online, Oct. 9, 2001). It also recently signed an agreement with Shell Gas and Power to develop an LNG regasification terminal in Altamira, Mexico (OGJ Online, June 28, 2001).
El Paso said it will be buying more than 40% of the capacity of the Snøhvit liquefaction facility on Melkøya island north of Hammerfest, Norway, which will come on stream in the fall of 2006
"We are extremely pleased to be a partner in Norway's first LNG export project," said William A. Smith, president of El Paso Global LNG. "This agreement will enable El Paso to supply an important new source of competitively priced natural gas for the growing Eastern and mid-Atlantic markets. We also expect to market additional supply at such time as the consortium decides to expand the LNG facility."
US LNG imports are projected to jump to 2.5 tcf/year by 2006, as the industry scrambles for new sources to supply expected demand of 30 tcf/year of gas in 2010, said John E. Hodgin, executive vice-president of Ryder Scott Co. LP, Houston, at a recent industry seminar (OGJ Online, Sept. 25, 2001).
The US has LNG receiving terminals at Lake Charles, La., Everett, Mass., and Elba Island, Ga. At least six more are proposed to serve the US market.
Spanish company Iberdrola SA has also agreed to buy 1.6 billion cu m/year of Snøhvit gas for 20 years. The agreements are subject to Norwegian Storting approval of Snøhvit's development plan.
Two of the licensees of the field -- Gaz de France SA and TotalFinaElf SA -- will lift their share of gas. Other Snøhvit licensees include Norwegian state stakeholder Petoro, Norsk Hydro SA, RWE-DEA Norge AS, Amerada Hess Norge AS, and Svenska Petroleum Exploration AS.