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April 2006

Vol. 11, No. 18 Week of April 30, 2006

Barents Sea production test a winner

Snohvit gas well flows above expectations at 120 million cubic feet per day; LNG project startup to come in late 2007

Ray Tyson

For Petroleum News

Production testing has begun on the massive Snohvit gas project in the Norwegian sector of the remote Barents Sea, with results on the first of nine initial production wells surpassing producer expectations, flowing at a maximum daily rate of around 120 million cubic feet. The test, conducted on a horizontal well over the Easter holidays, paves the way for project startup toward year-end 2007. Snohvit represents Norway’s first commercial gas project in the Barents Sea and Europe’s first development for liquefied natural gas, with future LNG cargoes destined for markets in Europe and the United States.

“The productivity index was rather higher than expected,” Thor Bensvik, drilling and well operations manager for Snohvit field operator Statoil, said in an April 24 statement unveiling results of the first production test.

Gas brought up during the test was flared, Statoil said, emphasizing that “no harmful emissions or discharges” would occur during normal production. Opening new areas to exploration in the pristine waters of the Barents Sea, a major fishery and environmentally sensitive region of the Arctic, is a major political issue in Norway’s Parliament.

Polar Pioneer semi-submersible

The first well was completed by Transocean’s Polar Pioneer semi-submersible rig, which Statoil said would perform the same operations on the remaining eight production wells and a carbon dioxide injection well drilled through Snohvit’s four seabed templates.

“After the rig leaves the field during June, no visible sign will remain at the surface that regular gas production is ready to begin from the field,” Statoil said, noting that gas production will be piped ashore for processing and gas liquefaction on Melkoya Island outside the Norwegian town of Hammerfest.

Snohvit is a technological marvel where all sub-sea development functions will be remotely controlled via an onshore operations “hub” or base, just over 100 miles away.

Snohvit is expected to produce 201.3 billion cubic feet of gas per year from the project’s initial wells, or about 706 million to 883 million cubic feet per day for shipment as LNG, according to Statoil.

Three fields at development

Norway’s Snohvit development actually includes three Barents Sea fields — Snohvit, Albatross and Askeladd. They were discovered in 1984 and extend across seven production licenses in water depths ranging from 820 to 1,132 feet. The total accumulation is believed to exceed 6.8 trillion cubic feet of natural gas and 113 million barrels of condensate.

A development plan for the Snohvit area was first proposed in 1991, but was shelved on economic grounds. Statoil submitted a plan for development and field operations in September 2001 that was approved in March 2002. Current plans call for a total of 21 wells.

Around 60 exploration wells have been drilled in the Barents Sea looking for oil. Efforts have mostly uncovered gas reserves, a commodity that while not generally as valuable as oil, has taken on increasing importance over the years with growing worldwide demand for LNG, particularly in the United States. Thus far, Snohvit is the only field in Norway’s Barents Sea that has been prepared for commercial production.

In addition to Statoil, participants in the Snohvit project include Petoro, Total, Gaz de France, Norsk Hydro, Amerada Hess, RWE Dea and Svenska Petroleum Exploration.

Snohvit is said to be a technology showcase for Norwegian state-owned Statoil, which is hoping the project will lead to a partnership with Russia’s Gazprom to develop the huge Shtokman gas field in the Russia sector of the Barents Sea. Gazprom is expected to soon announce partners for the project.

Other companies vying for a spot on the team include ConocoPhillips, Chevron, France’s Total and Norway’s Norsk Hydro.






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