Gassco changes Skanled development plans

Gassco AS revised development plans for the Skanled pipeline that would deliver Norwegian gas to Sweden and Denmark by 2012.

Jan. 17, 2009

2 min read

Uchenna Izundu
International Editor

LONDON, Jan. 17 -- Gassco AS revised development plans for the Skanled pipeline that would deliver Norwegian gas to Sweden and Denmark by 2012.

Gassco will abandon a separation plant for natural gas liquids in the Grenland area of southeast Norway because Ineos, a privately owned UK group and potential customer of the pipeline, has delayed plans to expand its cracker in the Rafnes region in Grenland due to changing market conditions. In 2007, Ineos said it would hold a 100% stake in the separation plant or take a majority share.

Ineos wants to add another 100,000 tonnes of ethylene capacity at the petrochemicals complex, based on a feedstock combination of LPG and ethane, and will proceed once there is sufficient market demand and available Norwegian ethane. It said it is committed to expansion of the Rafnes cracker and operations in Grenland in the long term.

Skanled, which will cost an estimated 10 billion kroner ($1.4 billion) is interdependent on receiving terminals in Norway, Sweden and Denmark, Gassco said. The pipeline's capacity is 24 million standard cu m/day.

Skanled, via a spur, will be a major driver in developing industrial companies in Grenland and the consortium hopes to submit installation and operation plans by April.

The 853-km line will go from Karsto on the Norwegian west coast to the Grenland area on the east coast and on to Sweden and Denmark. Gassco said that government approvals were required from all three countries to proceed with the project and confirm gas purchase contracts.

Poland is keen to extend the pipeline to its territory as it aims to reduce its reliance on Russian gas supplies.

Germany's Verbundnetz Gas (VNG) is interested in taking a 10% stake in Skanled and reserving 2 million standard cu m/day of capacity, meaning it would replace Hafslund.

"The clarification at Rafnes and VNG's intended entry to the project help to reduce its risk," said Gassco Vice-Pres. Thor O Lohne.

Contact Uchenna Izundu at [email protected].