Statoil Considering New LNG Plant in Finnmark

Statoil and its partners in the Snøhvit natural gas field in the Barents Sea have decided to perform studies of possible concepts for building a new LNG plant in Hammerfest.
The expansion of the processing capacity in Hammerfest is called Snøhvit Train II.

The existing LNG plant at Melkøya, just outside Hammerfest in Finnmark, was started its production in August 2007.

Snøhvit was Europe's first export facility for liquefied natural gas.

Statoil says in a press-release on Wednesday that although it is decided to go for a study, the investment decision will earliest be made in late 2013.

The new LNG-plant can then be expected to be in operation in 2018, at the earliest.

"Capacity expansion will accelerate the production of gas that has already been found and open for earlier production of new gas that extensive exploration activities in the Barents Sea can hope to discover", says Statoil's project manager, Geir A. Owren.

The new plant, to be built next to the existing plant, will be feed with gas from a substantial development offshore involving new subsea templates, production wells and a additional new pipeline to Melkøya.

If built, the construction investment will be several billion Euros.

Nothing is yet said about the possible capacity of the new plant. The current LNG-plant produces 13,000 tons LNG, 2,000 tons condensate and 900 tons LPG each day in operation.

Statoil, the main partner in the Snøhvit licence, is also partner with Gazprom and Total in the Shtokman DG, set to explore the possibilities at the northeastern Barents Sea Shtokman natural gas field.

BarentsObserver has earlier quoted Russian scientists predicting that Statoil will withdraw from the Shtokman project after the delimitation agreement with Russia on the borders in the Barents Sea was signed last autumn. The reason is that Norway with the agreement have got hold on new, more accessible fields in the Barents Sea, namely half of the Fedynski Ridge that can contain huge reserves of natural gas.

The Fedynski Ridge (named Hjalmar Johansen Ridge by the Norwegians), is located in the mid-part of the earlier disputed area in the Barents Sea.