BP agrees on gas export solution for Skarv field

May 02, 2005 02:00 AM

BP has agreed with its partners on a gas export solution for its 40 bn cm Skarv field in the Norwegian Sea that should see output by 2010, the company said. BP said it had agreed to transport the gas through existing the Aasgard pipeline system to the Kaarstoe processing facility, rather than build a new pipeline from the Halten-Nordland area -- where it owns an interest in several fields -- to the Tampen area.
BP said it had wanted to avoid what it sees as costly tariffs through Statoil Aasgard and Kaarstoe systems. BP owns a 30 % share in the Skarv field. Other owners include Statoil with 30 %, Shell with 25 % and ExxonMobil with 15 %.

BP said the agreement was a result of "strenuous efforts" to align on an export solution for Skarv and the connected Idun field. It had originally aimed for a start up of the field in the third quarter of 2009, then later said the Aasgard pipeline solution could delay output until 2012.
"This is very good news for the partnership, and for new activity inthe Mid Norway area," said BP Norge managing director Scott Kerr. "Securing the export solution enables us to prepare for the front end engineering in the fourth quarter of 2005...with the aim of sanctioning field development in 2006," he said. “This means that Skarv, which will be developed jointly with Idun, could be on stream during 2010," he added.

Although the export solution is subject to the approval by the gas infrastructure owners, the plan is the same as proposed by Norway's infrastructure operator Gassco earlier this year. It will require a spur pipeline from the Skarv field to the Aasgard pipeline. BP spokesman Jan Erik Geirmo refuted industry speculation that BP was planning to sell the asset if the project's Plan for Development is approved.
"Our intention is to keep and operate Skarv," Geirmo said.

BP recently sold out of its 10 % stake in the giant 400 bn cm Ormen Lange gas project, as well as holdings in several other small projects, as part of its " portfolio optimisation strategy."
Besides a fraction under 40 bn cm of natural gas, Skarv also has around 93 mm barrels of oil and gas condensate, or light oil. Idun has an estimated 13.5 bn cm in gas reserves. Statoil owns a 50 % share, Shell 40 % and Norsk Hydro 10 %.

Source: Dow Jones
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