Gassco - Future Gas Export from the Norwegian Continental Shelf - Thor Otto Lohne


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Presentation at the 17th German Norwegian Energy Forum in Berlin 2013

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Gassco - Future Gas Export from the Norwegian Continental Shelf - Thor Otto Lohne

  1. 1. Future Gas Export from the Norwegian Continental Shelf (NCS) Thor Otto Lohne CFO and Executive Vice President
  2. 2. The petroleum sector – Norway’s largest industry 2013 • • • • • • 76 fields are in production – more than 40% of the discovered resources are produced 55 companies are license holders on the Norwegian Continental Shelf (NCS) 42 wells drilled in 2012 The investment level in 2012 was more than 20 B€ (incl. exploration cost) Oil production (incl. NGL and condensate) in 2012 was about 1.9 million bbl/d Gas sale in 2012 was 114.8 GSm³ 2
  3. 3. The integrated Norwegian gas transport system • Connected to all major gas-producing fields on the NCS • 7 975 km of large-diameter, highpressure pipelines • Riser platforms • Large processing facilities in Norway • Receiving terminals in four European countries • Connected to major downstream gas transmission systems in Europe and the UK
  4. 4. Gassco • Gassco is responsible for safe and efficient gas transport from the Norwegian Continental Shelf • Key activities include: ‒ Asset management; technical operation and maintenance of the pipelines, platforms and onshore facilities ‒ System operations; planning and monitoring of the gas supply ‒ Capacity management; administration of the available transport capacity ‒ Infrastructure development; adjustments and expansions of the gas infrastructure 4
  5. 5. Situation on the Norwegian Continental Shelf (NCS) Norge har vært gjennom en periode med rask vekst i gassproduksjon og tilhørende oppbygging av infrastruktur Produksjon av naturgass og teoretisk eksportkapasitet, 1975-2010 GSm3/år 160 Other Gjøa (FLAGS) ODIN Tampen Link (FLAGS) Snøhvit 140 OSEBERG KRISTIN 120 Langeled TUNE GULLFAKS SØR 100 VEST EKOFISK Europipe II HEIMDAL 80 60 40 20 SNØHVIT Franpipe KVITEBJØRN EKOFISK Europipe FRIGG ÅSGARD Zeepipe Frigg transport (Vesterled) SLEIPNER ØST ORMEN LANGE Norpipe TROLL Exit-kapasitet 0 1975 1980 1990 2000 2010 Norway has had a rapid growth both in gas production and build-up of gas infrastructure Kilde: OD; Gassco Production from existing fields and discoveries is expected to decline after 2020 Størrelsen på et typisk gassfunn på norsk sokkkel har falt Sirkelstørrelsen er proporsjonal med samlede gassfunn i 5-årsperioden Gjennomsnittlig gassfunn per brønn GSm3 Regresjon som angir langsiktig trend ekskludert Troll og Ormen Lange 10 9 8 Incl Troll 7 6 5 4 3 Incl Ormen Lange Excl Troll 2 1 Excl Ormen Lange 0 1966-1970 1971-1975 1976-1980 1981-1985 1986-1990 1991-1995 1996-2000 2001-2005 2006-2010 Antall brønner i 5årsperioden 51 92 137 243 197 204 166 118 Tidsperiode 228 The average size of gas discoveries has decreased, thus the need for coordination and joint development is increasing Kilde: OD New production from undiscovered resources could be located far from existing gas infrastructure 5
  6. 6. Several field- and infrastructure development projects are ongoing on the NCS Barents Sea: • 16 fields under development. • 84 fields undergoing evaluation. • New gas and oil infrastructure projects in the Sleipner- and Tampen area. Norwegian Sea: • Several upgrading and robustness projects, e.g. Kårstø expansion project, Gassco Emden project. • Polarled investment decision 1Q 2013. • Barents Sea Gas Infrastructure (BSGI) forum established. North Sea: Source: NPD, Gassco 6
  7. 7. On the Utsira High in the North Sea significant oil and gas discoveries have been made - after 40 years of exploration The Gudrun field will start the production in 2014. Light oil from Gudrun will be processed at Kårstø. DRAUPNE WEST CABLE APOLLO The Edvard Grieg and Ivar Aasen fields are planning export of gas via the SAGE system to UK with start-up in 2015 and 2016 respectively. LUNO Johan Sverdrup, one of the largest discovery ever made on the Norwegian Continental Shelf, is planned to start-up in 2018. The gas and oil export solutions are currently being studied. 7
  8. 8. Extending the gas value chain northwards One of Europe’s largest industrial projects the next years. First crossing of Artic circle with a subsea pipeline. Deepest field development and pipeline on NCS. Investment decision 1Q 2013, start-up 2016. 8
  9. 9. Development of the resources in the Barents Sea require infrastructure solutions Several promising discoveries are made in the Barents Sea the recent years. The industry interest and expectations in the Barents Sea is high. The exploration activity in the Barents Sea is extraordinary high. Long distance to existing infrastructure require development evaluation in an area perspective. Undiscovered resources per area Source: NPD 9 9
  10. 10. Gassco has together with the industry started a significant work program for the Northern areas Barents Sea Gas Infrastructure Forum Oil & gas companies Project support Observers
  11. 11. Technology neutral evaluation of transport solutions Potential gas production from the Northern areas for different resource outcomes Maximum daily production, MSm3/day 150 Focus on understanding of the transportation needs in and from the Barents Sea 100 50 0 2010 2015 2020 2025 2030 2035 2040 Evaluation of applicable transport solutions for different resource and market scenarios 11
  12. 12. 1 Significant exploration programs - will yield new information on resources Gas dicoveries Oil discoveries Prospects 12
  13. 13. 2 Existing discoveries may justify a new gas transport solution - Illustrative transport costs from the Barents Sea, tariffs in NOK/Sm3 Low: 50 GSm³ Medium: 100 GSm³ High: 150 GSm³ 100 GSm³ Norvarg/ Ververis Snøhvit Melkøya Polarled Åsgard Nyhamna 13
  14. 14. 3 Impact of and on existing system – gas resources from the north will impact the investment decisions Description Heimdal/ Vesterled/ St. Fergus Kårstø • The utilization of the Heimdal-Vesterled-St.Fergus chain is dependent on new resources after 2020 • Investments required in the Heimdal-Vesteled-St. Fergus chain. Decisions dependent on the utilization of the infrastructure • The supplies from existing areas indicate a gradual decline of the utilization of Kårstø from 2021 and onwards • Investments to maintain capacity or shut in capacity will be dependent on additional resources 14
  15. 15. 4 Polarled precedence: 8-10 years to startup 2007 2008 2009 2010 2011 2012 2013 2016 2017 HaltenNordland Area Study NSGI Pre Feasibility (DG1) NSGI Feasibility (DG2) NSGI Concept decision (DG3) NSGI FEED (DG4) Production startup • Victoria • Aasta Hansteen • Linnorm • Victoria • Aasta Hansteen • Linnorm • Aasta Hansteen • Linnorm • Constrained Area B volumes • Upside volumes: Gro, Dalsnuten • Aasta Hansteen • Linnorm • Zidane • Constrained Area B volumes • Upside volumes: Asterix, Gro • Aasta Hansteen • Linnorm • Zidane • Fogelberg (not part of DG4 decision) • Constrained Area B volumes • Polarled startup Oct. 2016 • Kristin volumes from Oct. 2016 • Aasta Hansteen startup Q3 2017 15
  16. 16. Indicative Barents Sea infrastructure schedule 2013 2014 2015 2016 2017 2021 Further mature the resource basis in the Barents Sea and evaluate the need for increased export capacity BSGI Forum Establish sponsor group Potential timeline of events NPD Barents Southeast est. Awards 22. license round Confirm feasibility Concept selection Barents Sea Southeast opening FEED Awards 23. license round ~25 wells drilled – new discoveries New Barents gas transport Ny infrastruktur Ny infrastruktur fra uåpnede områder Atlantis Apollo Barentshavet Nord Barentshavet Nytt område 614 ? Wisting Barentshavet Sør Ververis Norskehavet NordØ s Norskehavet Sub-basalt t Norvarg Ververis Appraisal Aurelia Norvarg Appraisal Norvarg Appraisal Kramsnø Norskehavet Frontier Neiden Nunatak 606 Åsgard-området Skavl Saturn Skrugard & Havis Iskrystall Skårunge n Byrkje / Gloppen Barentshavsrør: 24 MSm 3/dag i 2022, utvidelse til 38 MSm 3/dag rundt 2025 NSGI-rør: 70 MSm 3/dag i 2016 Formica Nyhamna Selina Nucula Komag /Lavvo Ensis Darwin Gotha Snabb /Kart Skalle Snøhvit Goliat Askepott Gamma Bønna Alke Nord & Sør Barents Sea Exploration program 2013/2014 16
  17. 17. How we work Barents Sea Gas Infrastructure Forum (steering committee) BSGI secretariat (Gassco) Resources and production Technology Market Gas transport solutions NCS synergies Northern Area considerations 17
  18. 18. Illustration of potential transport solutions for the northern area 18
  19. 19. A potential Barents Sea pipeline vs. other NCS pipelines Pipeline Vesterled Norpipe Length in kilometers Route 350 Startup year • Heimdal – St. Fergus • Ekofisk – Emden 440 1978 1977 Europipe II 650 • Kårstø – Dornum 1999 Europipe I 660 • Draupner – Dornum 1995 • Åsgard – Kårstø 2000 Åsgard Transport 707 Zeepipe I 814 • Sleipner – Zeebrugge 1993 Franpipe 840 • Draupner – Dunkerque 1998 • Statfjord – Kårstø – Ekofisk 1985 • Melkøya – Åsgard Transport ? Statpipe Barents sea pipeline Langeled 880 1000 1200 • Nyhamna – Easington 2007 19
  20. 20. Development of new oil and gas resources are dependant on cost effective solutions Gasscos role is to contribute to maximize the value creation from the petroleum resources on the Norwegian Continental Shelf 20