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

1. Future Gas Export from the Norwegian
Continental Shelf (NCS)
Thor Otto Lohne
CFO and Executive Vice President

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. 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
www.gassco.no

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
www.gassco.no
4

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. 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. 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.
www.gassco.no
7

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.
www.gassco.no
8

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
www.gassco.no
9
9

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. 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. 1
Significant exploration programs - will yield new information
on resources
Gas dicoveries
Oil discoveries
Prospects
12

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. 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. 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. 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. 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. Illustration of potential transport solutions for the northern area
18

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. 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