LNG

Equinor, the Norwegian energy major, LNG plant owner and pipeline natural gas supplier to Europe, is increasing gas output on the Norwegian Continental Shelf with a gas field joint venture.

The UK-based Prax Group, a company whose business covers exploration and production to refining, has signed an agreement to acquire the interests of TotalEnergies in the UK North Sea Greater Laggan Area comprising mainly gas fieds and the Shetland Gas Plant.

Prax said it was buying the onshore Shetland Gas Plant as well as the French major’s interests in several nearby exploration licences.  The transaction whose value was not disclosed is subject to approval from the relevant authorities.

The Greater Laggan Area fields include the Laggan, Tormore, Glenlivet, Edradour and Glendronach fields and are located about 140 kilometres (87 miles) west of the Shetland Islands.

Current production for the TotalEnergies interests is around 7,500 barrels of oil equivalent per day, made up of about 90 percent natural gas.

Sullom Voe location

The Shetland Gas Plant is located at Sullom Voe and is the collection and gas processing facility for the offshore Laggan-Tormore projects, comprising two large gas and gas condensate fields.

The Laggan and Tormore gas fields are in sea depths of 600 metres (2,000 ft).

The Shetland Gas Plant is also connected to the Shetland Islands Regional Gas Export (SIRGE) pipeline, which is 234km in length with capacity of 665 million standard cubic feet per day.

The SIRGE pipeline provides transportation services for the export of gas from the West of Shetland fields to the UK mainland market.

Prax had previously acquired Hurricane Energy in 2023. This is a UK-based oil and gas exploration and production company with a 100 percent operated interest in the Lancaster offshore oil field in the West of Shetland basin.

“With a strong track record of integrating acquisitions and managing assets in the oil and gas value chain, the Prax Group is a long-standing and trusted partner of TotalEnergies,” explained Sanjeev Kumar Soosaipillai, Chairman and Chief Executive of the Prax Group.

“The announcement of the signing of this agreement is the culmination of many months of solid co-operation between our respective companies,” he added.

UK value chain

“Our strong balance sheet has enabled the Group to execute its growth strategy having successfully completed two major acquisitions last year, and with two other transactions in the pipeline, I am delighted that the Prax Group is able to announce its proposed expansion in West of Shetland, as part of our long-term plan to strengthen our position across the whole oil and gas value chain,” stated the Prax CEO.

Discussing the reasoning behind the sale by TotalEnergies, the company’s Jean-Luc Guiziou, Senior Vice President in Europe for Exploration and Production, said that the transaction was in line with the company’s strategy to continuously adapt its portfolio by divesting mature non-core assets.

“TotalEnergies remains committed to the UK through both its upstream portfolio in the North Sea (Elgin-Franklin, Culzean and Alwyn fields) and its Integrated Power and Renewables portfolio,” Guiziou stated.

The Prax Group is headquartered in the UK and describes itself as a British multinational and independent E&P company and with a distribution and sales unit dealing in petroleum products and bio-fuels.

The Prax Group also has US and Asian offices in Houston, Texas, and in Singapore. 

Norwegian major Equinor and its partners in the Snøhvit Future project and Hammerfest LNG have awarded a construction and installation contract to domestic company Leonhard Nilsen & Sønner.

The project partners of Equinor are Norway’s Petoro, Fance’s TotalEnergies, UK-listed Neptune Energy and Germany’s Wintershall Dea.

The Snøhvit Future project includes onshore compression and electrification of the Hammerfest LNG export plant.

The regulators postponed the start of electrification by two years until 2030 compared with the original schedule and in the interim the plant will continue to run on gas turbines.

The gas turbines will also be maintained for back-up power from 2030 to 2033.

Exports

Hammerfest exports around 4.70 million tonnes of LNG per annum and most of the volumes are delivered to European destinations like France, Spain, the Netherlands and Lithuania.

Most feed-gas for Hammerfest comes from a total of 20 wells in the Snøhvit and Albatross fields.

This output is transported to land through a 143-kilometre (90-mile) pipeline and the plant processes around 18.4 million cubic metres (mcm) of natural gas per day.

The Leonhard Nilsen company is headquartered in Andøy in Norway’s Nordland county and the work is worth 1.5 billion Norwegian crowns ($143 million) and will generate local spin-offs for other areas including Finnmark and Troms.

“We are pleased to award this contract to a company in Northern Norway. For Equinor, it has been important that the Snøhvit Future project should create ripple effects throughout the region,” said Trond Bokn, Equinor’s Senior Vice President for Project Development.

Reliable supplier

“The Snøhvit Future project will strengthen Norway’s position as a reliable long-term supplier of gas produced with very low greenhouse gas emissions,” Bokn added.

The project will secure jobs in the North of Norway and guarantee energy supply to Europe through 2050.

Three large modules will be installed at the Hammerfest plant including a compressor, a substation and electric steam boilers.

“Extensive modification work will also be carried out. In addition, there will be a lot of activity around Hammerfest, including the construction of a tunnel and transformer substation allowing power to be transmitted from Hyggevatn to Melkøya,” Equinor explained.

Hammerfest LNG is a key company in the region with approximately 350 permanent employees, plus about 150 contractors and apprentices.

The LNG plant also pays 170 million crowns in property taxes annually to the Hammerfest municipality.

As specialists in tunnelling, the Leonhard Nilsen company has delivered several large-scale projects both in Norway and abroad, and construction work will start once the necessary approvals and permits have been received. This is the company’s first assignment for Equinor.

“They submitted the best bid overall, and we look forward to working with a new supplier in the region. Leonhard Nilsen also has a number of sub-suppliers, including Viggo Eriksen in Hammerfest, Alta Anlegg and Hörmann Norway in Tromsø,” said Mette H. Ottøy, Equinor’s Chief Procurement Officer.

European pipeline natural gas provider and LNG cargo exporter Norway has made a strategic decision to keep open the nation’s last coal mine located on the demilitarised archipelago of Svalbard in the Arctic despite opposition from the green lobby.

Equinor, the Norwegian oil and gas company, has initiated a safe shutdown of the Gudrun, Oseberg South and Oseberg East offshore fields in the North Sea because of a strike and prolonged action could lead to a reduction in pipeline natural gas exports to Europe.

Norway, an exporter of LNG and pipeline natural gas as well as oil cargoes, is a frugal country when it comes to its own natural gas demand with annual needs of just 6.3 billion cubic metres.

North Asia spot liquefied natural gas cargo prices increased while the European Union benchmark Dutch Title Transfer Facility price gained even more ground above $40 per million British thermal units as winter supply fears offset storage gains and a rise in liftings from global liquefaction plants.

The Norwegian Ministry of Petroleum and Energy has issued details of the 2022 oil and natural gas exploration and production licence round for allocations in predefined areas (APA) on the Norwegian Continental Shelf and with the application deadline set for Monday 12th of September 2022.

North Asian spot cargo prices declined on the week while remaining at seasonal highs through to the second quarter as cargo liftings fell and European values stayed above the Asia price with energy markets buoyed by crude oil over $90 a barrel.

Norway, the LNG producer and a main supplier of natural gas and petroleum in Western Europe, praised the progress of its Northern Lights carbon-capture joint venture, one of the largest in the world to capture and store carbon dioxide, the main greenhouse gas.

Norwegian Minister of Petroleum and Energy Marte Mjøs Persen has just made a speech on the progress of the Northern Lights CCS project.

“Despite living in the grasp of the pandemic, I consider climate change and the energy transition as the challenges of our lifetime,” she stated.

“Last month, I had the pleasure to visit the Northern Lights facility at Øygarden,” explained the Minister.

The Northern Lights joint venture is the storage part of an even larger project called Longship.

Northern Lights will receive captured CO2 transported on ships to the Øygarden municipality on the Western Coast of Norway.

NCS site

The CO2 will then be temporarily stored at Øygarden before being sent through a pipeline to the storage site on the Norwegian Continental Shelf.

At the storage site CO2 will be pumped down to a sealed reservoir for permanent storage 2,600 metres below the seabed.

“What I already knew, and which certainly became even clearer there, is that CCS is a crucial part of the solution to the climate challenge,” said Mjøs Persen.

“And, that Norway can offer an open access storage solution that is built on the knowledge and experience we have developed on the Norwegian Continental Shelf,” she stated.

The Minister added that CCS can also make an important contribution to the development of new and green industries, such as carbon neutral cement production and hydrogen.

“The government is committed to following up the Longship-project and invest in CCS to cut emissions and create jobs and to develop a robust value-chain for CCS and the storage in the North Sea,” she declared.

“However, as we all know, if CCS is to become an efficient instrument in reducing emissions, the Norwegian CCS project must be a catalyst for other European projects and for international technology development,” said Mjøs Persen

The Norwegian CO2 reservoir site is located in the northern part of the North Sea, southwest of the Troll oil and gas field, one of the largest on the NCS.

The estimated total investment under the development plan is close to 6 billion Norwegian crowns ($780 million) and annual operating costs will be around 370M crowns ($44M).

The approved plan has the capacity to store 1.5 million tonnes of CO2 annually and has a planned operational period of 25 years.

Northern Lights will be built and operated by the Northern Lights joint venture, comprising energy companies Equinor of Norway, and the Norwegian subsidiaries of Shell and France’s TotalEnergies.