Sunday, September 23, 2007

Norwegian gas group sets up biggest liquefied gas project in Europe

Fri Sep 21, 2:11 PM ET

OSLO (AFP) - Norwegian oil company Statoil said Friday it had set up the biggest liquefied natural gas (LNG) project in Europe in the Barents Sea.

It said the large-scale gas project also involves French oil group Total and gas utility Gaz de France, who respectively hold 18.4 percent and 12 percent of the project, against Statoil's 33.53 percent.

Situated at the northern tip of Norway, and linked by pipeline to the gas deposit at Snoehvit, the project produced its first cubic metres of liquefied natural gas on September 13 after five years of development and with a cost overrun of 18.8 billion kronor (2.4 billion euros, 3.3 billion dollars), it said.

Initially fixed at 39.5 billion kronor, the cost of the project ran to 58.3 billion, Statoil said.

The other partners are the Norwegian company Petoro (30 percent), US firm Hess (3.26 percent), and Germany's RWE-DEA (2.81 percent).

"The first phase will be characterised by instability," Tim Dodson, Statoil's acting executive vice president for exploration and production Norway said in a statement.

"We must expect that the plant will again be closed for shorter or longer periods for further adjustments to the process."

The gas is destined for the American and European markets.