Our Arctic Neighbors: StatoilHydro ready for Shtokman collaboration

Norwegian company will use experience from Ormen Lange, Snohvit to develop subsea installations for Russian Barents Sea project

Sarah Hurst

For Petroleum News

Norway’s StatoilHydro is gearing up for the “mother of all projects” — developing the Shtokman gas field in the Russian part of the Barents Sea — Bengt Lie Hansen, the company’s president in Russia, said in a speech at the Murmansk International Economic Forum Oct. 15. StatoilHydro is a partner in phase one of Shtokman, with a 24 percent interest in the Shtokman Development company. Russia’s Gazprom has a 51 percent interest and France’s Total has the remaining 25 percent.

StatoilHydro was trying for 20 years to get involved in Shtokman before signing the phase-one agreement in February 2008, Hansen said.

“(Shtokman) I think will be the locomotive for developments in the Arctic,” he said. “And I think that will not only have implications for the investing companies, it will have lots of implications for the Murmansk region, as we have seen in other areas where there are offshore developments, you see a lot of spinoff effects that you hardly are able to assess before you start out.”

Shtokman will provide gas to Europe via the planned Nord Stream pipeline under the Baltic Sea, and to Atlantic markets in the form of LNG, according to Hansen. StatoilHydro’s experience developing the Ormen Lange gas field in the Norwegian Sea just south of the Arctic Circle and the Snohvit gas field in the Barents Sea will enable it to develop the subsea installations for Shtokman, he said.

“Tie these installations after they’ve been pre-drilled by floating units to the large floating unit, which will be the floating production ship, which will be disconnectable due to the harsh environment and the ice,” Hansen said. “Bring the gas and the condensate onshore to Teriberka, a journey of about 600 kilometers (373 miles), for processing and ready for transportation as pipeline gas as well as LNG.

“StatoilHydro feels prepared for venturing north together and we think that we can bring three main elements to that table, called TPC,” Hansen said. TPC stands for “technology enabler,” “performing challenging development tasks” and “cooperation across borders.” The company has been an architect in developing technology on the Norwegian continental shelf and its skills in that regard are highly relevant in Russia, Hansen explained.

“We have been able to carry out megaprojects within cost and schedule — complex projects,” Hansen said. “We know that these … have a tendency to experience cost overruns and schedule slippages, which of course has a detrimental effect on the viability of the project. So no one can guarantee, but I think we have to use the best experience and the best expertise we can get hold of.

“And my last comment is cooperation,” Hansen said. “I think that is very important: We have been able to drive the cooperation between the authorities, the suppliers, the research facilities and the oil companies to obtain maximum value for everyone involved, and I think that is also some luggage that we would like to bring to Russia, which I think can create even better results in the future. So we are looking forward to be one of the partners in developing these fantastic possibilities that we can see in the Arctic.”