Norway's Statoil and Its Partners Are Going Ahead with The Development of The Project

Norway's Statoil and its partners are going ahead with the development of the major Aasta Hansteen natural gas field project in the Norwegian Sea, as well as the planned Polarled pipeline linking it to shore, at a combined cost of NOK57 billion ($10.2 billion). 

Statoil Tuesday submitted to Norway's oil minister Ola Borten Moe the development plans for the deepwater field, located in water depths of 1,300 meters, and the pipeline. 

The investments in the Aasta Hansteen development are estimated at NOK32 billion, while spending on Polarled is estimated at NOK25 billion, Statoil said. 

"Aasta Hansteen will be the first deepwater development in the Norwegian Sea," said Oystein Michelsen, Statoil's executive vice president, development and production Norway. 

"At the same time, this opens up the possibility of tying in existing and new discoveries. The development may generate substantial ripple effects in the north," Michelsen said. 

The Norwegian Sea is a less mature petroleum province than the North Sea. Aasta Hansteen is located the furthest north of existing fields in the Norwegian Sea. 

Draugen was the first field to come on stream in 1993 and now 14 fields are producing in the Norwegian Sea after the development of Morvin. 

Most recently, BP started up the Skarv gas field at the end of December. 

Three other fields -- Marulk, Hyme and Skuld -- are being developed. 

The planned Aasta Hansteen field development includes a SPAR platform, which will be the first such installation on the Norwegian Continental Shelf, Statoil said. SPAR is a floating installation consisting of a vertical column moored to the seabed. 

Aasta Hansteen was formerly known as the Luva field while the Polarled pipeline was originally known as the Norwegian Sea Gas Infrastructure (NGSI) pipeline. 

Aasta Hansteen was discovered in 1997; the Norwegian Petroleum Directorate says it has recoverable reserves currently estimated at around 47 billion cubic meters of gas. 

The field development is expected to be launched in the fourth quarter of 2016, with first production planned for the third quarter of 2017. At plateau, Aasta Hansteen will produce around 130,000 b/d of oil equivalent, Statoil said. 

Statoil is operator of the project with a 75% stake. Partners are Austria's OMV (15%) and ConocoPhillips (10%). 

NEW PIPELINE 

The NPD says the partners plan to transport gas from Aasta Hansteen as well as Shell's nearby 6406/9-1 Linnorm discovery in the new Polarled pipeline to the onshore Nyhamna plant in northern Norway, which also processes the gas from the Ormen Lange field. 

The CEO of Gassco, which manages the Norwegian pipeline system, said in a statement that the Polarled pipeline was strategically significant because it had the potential to tie in other discoveries in the gas-rich region that could be expected in the future. 

"This represents a crucial step in the long-term development of Norway's gas resources," Brian Bjordal said. 

"It also takes into account further potential resources from undiscovered Norwegian Sea resources," Bjordal added. 

Statoil is development operator for the 480 km pipe, which when started in 2016 will be incorporated into the Norwegian Gassled joint venture with Gassco as operator. 

Gassco spokesman Kjell Varlo Larsen told Platts there would also be a 30km spur to the Statoil-operated Kristin gas condensate field. 

But he also emphasized the potential for further tie-ins to existing and future discoveries. "We have various other prospects. I don't want to name them right now," he said. 

Norwegian newspapers have written that other tie-ins could be the Zidane and Linnorm fields with a connection to the Asgard Transport pipeline. 

SLIGHT DELAY 

The development plan submission for Aasta Hansteen was scheduled to be in late 2012, but a report in Norwegian technical journal Teknisk Ukeblad said there had been tough negotiations among the various licensees over who should foot the bill for the Polarled pipeline. 

With Gassco and Statoil, the partners in Polarled are: Norway's Petoro, OMV, Shell, France's Total, Germany's RWE Dea, ConocoPhillips, Italy's Edison, Denmark's Maersk Oil and France's GDF Suez. 

A further complication emerged late last year when Shell announced that the license partners had decided to postpone the investment decision for the development of Linnorm field. 

Shell said new calculations showed that the estimated cost of any development had increased since the concept selection was undertaken in late 2011 and that due to higher costs Linnorm required technically challenging solutions. 

Gassco spokesman Kjell Varlo Larsen said Tuesday that Shell could still tie in Linnorm in the future if it went ahead, and the group would in any case have a major presence and investment in the pipeline. 

"Shell is involved in the project. They will have a major part and they will be responsible for the work at the Nyhamna plant," he said.