By OGJ editors
HOUSTON, Sept. 16 -- An underestimation of the scope of the Snøhvit natural gas development and LNG project off Norway has led to an 8-month delay in the field's expected Phase I gas deliveries and increased the project's costs by $1.1 billion, reported project operator Statoil ASA. The project is the first gas development in the Barents Sea and will be Europe's first LNG export scheme.
The project originally was slated to begin delivering 4.2 million tonnes/year of LNG in 2006 to Spain and the US, but initial gas is now expected June 1, 2007, with regular deliveries slated for the following December. Statoil said it is seeking alternative sources of supply for these customers until Snøhvit production begins.
Statoil Chief Executive Helge Lund said the now-$9 billion project was "not sufficiently mature" when sanctioned in 2001. This led to delays in engineering and to modifications in refrigeration modules, electrical systems, and other elements of the LNG gasification plant on Melkøya Island near Hammerfest in northern Norway (OGJ, Oct. 11, 2004, p. 58).
"Considerably more work remains to be done at Melkøya than was previously estimated," Lund said, adding that the LNG plant nonetheless remains a profitable venture.
Statoil holds 33.53% of Snøhvit. Other licensees are Petoro AS 30%, Total SA 18.4%, Gaz de France 12%, Amerada Hess Norge AS 3.26%, and RWE DEA Norge AS 2.81%.
