19 May 2007 - 10:55
  • News Code: 104962

Statoil AS expects to send first LNG exports from its Snøhvit LNG project in the Barents Sea in the fourth quarter, said Tor Martin Anfinnsen, Statoil senior vice-president, natural gas, trading, and operations, at a gas seminar in London.

The project is a year late because of delays in receiving the processing unit and site preparation delays at Melkøya, off the coast of Hammerfest, all of which have contributed to spiraling costs.

 

Snøhvit will send exports to the US and southern Europe, and Statoil has been building up its trading operations division in preparation for that and spot cargoes, Anfinnsen added.

 

Second train considered

Statoil is considering adding a second train to the 4.1 million tonne/year liquefaction plant but wants first to make its reserves "more robust" following other discoveries, said Rune Bjørnson, Statoil"s executive vice-president for natural gas.

 

He said the dispute between Russia and Norway regarding the demarcation of a border over a 155,000 sq km "grey area" in the Barents Sea will not affect a decision to install an additional train.

 

The area in question, estimated to hold vast petroleum resources, has been unexplored over the past 30 years because of the dispute. However, both countries have signalled a willingness to start negotiations over the border, as their cooperation could enable them to tap into an estimated total of 40 billion boe of resources in the Barents Sea.

 

"We are doing exploration in the Norwegian part of the Barents Sea," Bjørnson said, adding that the more attractive prospects appear to be in the eastern Barents Sea, and so the dispute must first be resolved.

 

Setting up a second train would be a matter of judgement, economics, and market expectations, Bjørnson said. One of the issues is the length of years a second train would be expected to produce LNG for exports. Although Statoil is "discussing the options" concerning the addition of a second train, Bjørnson emphasized that it was too early to be taking action and that the company"s focus "has been on train one."

 

Last week Statoil awarded the $36.6 million (220 million kroner) construction and technical on-site services contract to NCC Construction AS for the Hammerfest LNG plant that is being built on Melkøya island.

 

The 5-year contract, effective on May 1, includes maintenance of buildings and their technical systems, as well as some improvements and modifications. NCC Construction will have a permanent administrative staff of about five people at Melkøya.

 

Statoil said: "This is the last big contract relating to the operations phase of the Hammerfest LNG project."

 

PIN/OGJ.COM

News Code 104962

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