LNG

Equinor, the Norwegian oil and gas company, is boosting the feed-gas supplies from another field in the Barents Sea to produce more LNG from the Hammerfest plant on Melkøya Island in northern Norway.

Equinor, the Norwegian oil and gas company whose Hammerfest LNG plant is scheduled to resume production in mid-May, has made a new natural gas and oil discovery in the North Sea.

State-owned Equinor is the operator of production licence 293 B close to the Troll and Fram area where the find was made.

“Based on preliminary estimates the size of the discovery is between 4 and 8 million standard cubic metres of recoverable oil equivalent, or 25-50 million barrels of recoverable oil equivalent,” said the company.

Temporarily called Kveikje, this is the sixth discovery in this area since the third quarter of 2019.

“Up to more than 300 million barrels of oil equivalent were proven in the five former discoveries,” said Equinor.

The discovery comes as the Hammerfest LNG plant is scheduled to come back on stream following repairs from a fire in September 2020 and will provide more than 6 billion cubic metres of gas per year from the Barents Sea to European customers.

“We are very pleased to make another discovery in this area that we regard to be commercial,” said Lill H. Brusdal, Equinor’s vice president for the Troll area’s exploration and production.

Tie-in

“As we did with the other discoveries in this area, we will consider tying this discovery to the Troll B or C platform,” added Brusdal.

“By utilising the existing infrastructure, we will be able to recover these volumes at a low cost and with low emissions,” she stated.

“There were several drilling targets in the exploration well. After Kveikje was discovered, drilling continued to the next target in the upper part of the Cretaceous stratigraphic sequence,” said Equinor.

The well was drilled by “Deepsea Stavanger” and the latest plans are for Equinor to drill another exploration well in this area this year.

The licence owners are Equinor (51 percent), Norwegian firm DNO AS (29 percent), Japan’s Idemitsu (10 percent) and London-listed Longboat Energy (10 percent).

Equinor’s exploration strategy is to explore for volumes in mature areas, where discoveries can be tied into existing infrastructure to maximise the value of investments.

“We will drill between 20 and 30 exploration wells each year moving forward,” said the company.

“Around 80 percent of the exploration wells will be drilled in familiar areas near existing infrastructure, but certain new areas and ideas will be tested.,” said the Stavanger-based company. 

Norwegian state-controlled energy company Equinor must fix a series of breaches of safety measures exposed by a fire in September 2020 by June 2021 if the Hammerfest LNG export plant on Melkoya Island is to re-open on scheduled.

Equinor, the operator of the Hammerfest LNG export plant on Melkoya Island in Northern Norway, confirmed that the facility had suffered a serious fire on September 28 shortly after re-opening following a previous closure as a safety measure because of a gas leak.

The Dunkirk liquefied natural gas import terminal on the Channel Coast of France said it accommodated 37 LNG carriers during the first five months of the year and in June also received a cargo from the newest US export plant, Cameron LNG in Louisiana.

“This intense level of activity is due to a complex combination of factors linked to the supply of and demand for LNG on global markets as well as the appeal of the Dunkirk LNG terminal in the market of northwest Europe,” said Pierre Dumont, volumes manager at the Dunkirk LNG company.

The 177,000 cubic metres capacity carrier “Marvel Crane” arrived with the US cargo on June 18 at the French terminal.

The Dunkirk facility was commissioned at the end of 2016 and is now owned and operated by a consortium comprising Fluxys of Belgium, operator of the Belgian Zeebrugge import terminal and insurance and banking groups from France and South Korea.

One of its advantages is that it offers easy access to European gas markets for new LNG cargo sources such as Russia and the US as well as traditional suppliers like Algeria, Qatar, Nigeria and Norway.

French energy major Total, a shareholder in the US Cameron plant, was one of the original shareholders in Dunkirk LNG with France’s main utility Engie, though both sold their Dunkirk stakes in 2018.

However, Total is still a supporter of the Dunkirk facility, which also receives Russian volumes from the Yamal plant in northern Siberia, where Total is also a stakeholder.

“The huge influx of LNG at our terminal is attributable, in part, to the supply of and demand for LNG on the global market,” said Dunkirk manager Dumont.

Supply is higher than expected due, in particular, to the production of LNG that was greater than initially foreseen at the Yamal LNG plant in Russia.

The Russians chose to channel these volumes towards the European market rather than Asia.

“However, the increase in supply occurs at a time when demand in Europe is stable and demand from Asia is rising more slowly than expected,” he added.

Dumont said that LNG producers have been forced to find the best possible outlets for their volumes while taking into account the market conditions.

“Under these market conditions, terminals in the northwest of Europe fulfil the market's expectations very well,” said Dumont.

“Dunkirk exceeds these expectations for at least two reasons,” he added.

“On the one hand, it offers access to both the French and Belgian markets and, on the other, it offers a competitive and environmental advantage thanks to the use of warm water from the Gravelines nuclear power plant to reheat the LNG and thereby turn it back into a gas (before it enters the transmission network), instead of using a more costly form of energy,” he explained.

“Our clients can therefore unload, store and regasify their LNG at our terminal under very favourable conditions,” stated Dumont.