By OGJ editors
HOUSTON, June 18 -- A recently inked natural gas supply contract between Norway's Statoil ASA and Centrica PLC unit British Gas Trading Ltd. could serve as a driver for the construction of additional gas transmission pipelines from Norway into the UK.
Earlier this month, Statoil and British Gas Trading signed a gas sales contract for the supply of 5 billion cu m/year of gas. The 10-year supply deal is set to commence in October 2005.
The sale, which would mark Statoil's biggest (based on annual volumes) since its Troll gas sales agreement in 1986, "secures a good commercial outlet for Statoil's gas and is therefore key to the future development of new gas fields off Norway to increase supplies into Europe," said Peter Mellbye, executive vice-president of the company's natural gas business segment. The deal is still pending approval by Statoil's board.
Presently, Mellbye noted, there is a single pipeline transporting gas from the gas supply infrastructure on the Norwegian Continental Shelf to the UK. Mellbye added that Statoil is currently evaluating "several possibilities" for more links to increase capacity for transporting gas into the UK. Statoil also supplies natural gas to continental Europe via five pipelines, Mellbye said.
Last year, Statoil signed a similar gas supply contract for 15-years to supply BP PLC with 1.6 billion cu m/year of natural gas.
The volumes of gas for this most recent deal will be delivered at the National Balancing Point, the UK's notional gas trading point, Statoil said.