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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Norway is reassessing a plan to build a pipeline connecting its infrastructure to underdeveloped gas resources in the Arctic.
A report commissioned by the country's Ministry of Petroleum and Energy has confirmed that extending the Norwegian gas pipeline grid to the Barents Sea in the far north, would be "economically favorable" based on proven resources in the area. The investigation was carried out by Norway's gas transport authority Gassco, and a proposed plant and pipeline will cost billions of euros. The Barents Sea has been traditionally underdeveloped due to the lack of infrastructure, extreme conditions, political instability and the fluctuating price of oil. In 2020, Gassco reported that a similar plan would be unprofitable. However, following Russia's invasion of Ukraine last year and its subsequent gas cutoffs to Europe, Norway has been enjoying a bump in exports.
Earlier this year, Gassco reported that Norwegian pipeline gas exports to Europe rose 3.3% in 2022. It exported 116.9 billion cubic meters (Bcm) through its 8,800-kilometer pipeline network in 2022, up from 113.2 Bcm a year prior but short of a 2017 record of 117.4 Bcm. "The war in Ukraine has led to an increase in the demand for stable and reliable deliveries of natural gas, and the production of Norwegian gas is vital for meeting Europe's energy needs," Gassco Chief Executive Officer Frode Leversund said at the time.
"Today's export capacity in the Barents Sea is limited to Hammerfest LNG," explained Norway's Minister for Oil and Energy, Terje Aasland. "Without increased export capacity, other gas resources will be locked up for a long time. The Barents Sea is the sea area with the greatest expectations for undiscovered gas resources and a lack of available export capacity affects companies' interest in looking for gas. A profitable increase in gas transport capacity from the Barents Sea could be a key factor for the further development of the Barents Sea as a petroleum province."
In March, Gassco was tasked with identifying various main alternatives to increase gas transport capacity from the southern Barents Sea, including the degree of flexibility for phasing in any new gas volumes. Gassco was also asked to make profitability assessments for the most realistic alternatives and highlight uncertainty related to costs and resource bases. Of the considered alternatives for increased gas transport capacity, a Dew Point Control Units (DPCU) plant with pipe transport provides the "best shelf economy," Gassco found. "This option is the most robust as an area solution with the highest flexibility to handle possible additional resources." According to the Norwegian Petroleum Directorate, there are substantial gas resources in the Barents Sea. It estimates that 37% of the total unproven gas resources are expected to be in the Barents Sea South, while a further 29% are expected to be in the Barents Sea North. This makes up more than 60% of the total unproven resources on the Norwegian shelf, amounting to a potential 685 billion standard cubic meters (Sm3) of gas.
Norway's two key producing fields in the Barents Sea are Snohvit and Goliat, with future potential for the Johan Castberg field. It lags far behind Norway's other major locations in terms of development. The North Sea is still the powerhouse of the Norwegian petroleum industry, with 70 fields in production. In addition, there are 21 fields in production in the Norwegian Sea. Last December Var Energi announced the biggest new discovery in the Barents Sea. The Lupa well, in the area of the Goliat field in the western Barents Sea, is estimated to hold between 9 million and 21 billion cubic meters of recoverable gas resources. Industrial Info is tracking three associated Lupa projects worth more than US$110 million. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the reports.
Gassco's report concluded that estimates for the Snohvit resources alone show that the Hammerfest LNG plant on Melkøya is fully utilized until around 2040. Without new gas transport capacity, the plant will be fully utilized until 2050 based on proven resources in the field and discoveries. The estimate for undiscovered resources in the vicinity of existing and planned fields in Barents Sea South are in the order of 80 billion cubic meters.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
A report commissioned by the country's Ministry of Petroleum and Energy has confirmed that extending the Norwegian gas pipeline grid to the Barents Sea in the far north, would be "economically favorable" based on proven resources in the area. The investigation was carried out by Norway's gas transport authority Gassco, and a proposed plant and pipeline will cost billions of euros. The Barents Sea has been traditionally underdeveloped due to the lack of infrastructure, extreme conditions, political instability and the fluctuating price of oil. In 2020, Gassco reported that a similar plan would be unprofitable. However, following Russia's invasion of Ukraine last year and its subsequent gas cutoffs to Europe, Norway has been enjoying a bump in exports.
Earlier this year, Gassco reported that Norwegian pipeline gas exports to Europe rose 3.3% in 2022. It exported 116.9 billion cubic meters (Bcm) through its 8,800-kilometer pipeline network in 2022, up from 113.2 Bcm a year prior but short of a 2017 record of 117.4 Bcm. "The war in Ukraine has led to an increase in the demand for stable and reliable deliveries of natural gas, and the production of Norwegian gas is vital for meeting Europe's energy needs," Gassco Chief Executive Officer Frode Leversund said at the time.
"Today's export capacity in the Barents Sea is limited to Hammerfest LNG," explained Norway's Minister for Oil and Energy, Terje Aasland. "Without increased export capacity, other gas resources will be locked up for a long time. The Barents Sea is the sea area with the greatest expectations for undiscovered gas resources and a lack of available export capacity affects companies' interest in looking for gas. A profitable increase in gas transport capacity from the Barents Sea could be a key factor for the further development of the Barents Sea as a petroleum province."
In March, Gassco was tasked with identifying various main alternatives to increase gas transport capacity from the southern Barents Sea, including the degree of flexibility for phasing in any new gas volumes. Gassco was also asked to make profitability assessments for the most realistic alternatives and highlight uncertainty related to costs and resource bases. Of the considered alternatives for increased gas transport capacity, a Dew Point Control Units (DPCU) plant with pipe transport provides the "best shelf economy," Gassco found. "This option is the most robust as an area solution with the highest flexibility to handle possible additional resources." According to the Norwegian Petroleum Directorate, there are substantial gas resources in the Barents Sea. It estimates that 37% of the total unproven gas resources are expected to be in the Barents Sea South, while a further 29% are expected to be in the Barents Sea North. This makes up more than 60% of the total unproven resources on the Norwegian shelf, amounting to a potential 685 billion standard cubic meters (Sm3) of gas.
Norway's two key producing fields in the Barents Sea are Snohvit and Goliat, with future potential for the Johan Castberg field. It lags far behind Norway's other major locations in terms of development. The North Sea is still the powerhouse of the Norwegian petroleum industry, with 70 fields in production. In addition, there are 21 fields in production in the Norwegian Sea. Last December Var Energi announced the biggest new discovery in the Barents Sea. The Lupa well, in the area of the Goliat field in the western Barents Sea, is estimated to hold between 9 million and 21 billion cubic meters of recoverable gas resources. Industrial Info is tracking three associated Lupa projects worth more than US$110 million. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the reports.
Gassco's report concluded that estimates for the Snohvit resources alone show that the Hammerfest LNG plant on Melkøya is fully utilized until around 2040. Without new gas transport capacity, the plant will be fully utilized until 2050 based on proven resources in the field and discoveries. The estimate for undiscovered resources in the vicinity of existing and planned fields in Barents Sea South are in the order of 80 billion cubic meters.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
