Statoil To Start World's First Subsea Gas Compressor In September

OSLO, July 17 (Reuters) - Norway's Statoil plans to commission in September the world's first subsea gas compression facility, a technology that could prove significant for oil companies as they seek to move offshore equipment to the seabed, away from ice and storms.

Statoil called the facility, supplied by Norway's Aker Solutions, "a quantum leap" in subsea technology.

"Such technology has never been tested in the world before, so we are quite excited to see the results," Statoil spokesman Morten Eek said.

Along with another similar planned facility, the two will boost pressure at the Midgard and Mikkel reservoirs tied to the Aasgard field, helping increase total production by 306 million barrels of oil equivalent (45.9 billion cubic metres) of gas.

Norway's total gas production in 2014 stood at 109 bcm.

The pioneering technology has turned out to be particularly challenging, leading to longer commissioning time and higher costs. Statoil now estimates the cost at 19.4 billion Norwegian crowns ($2.4 billion), up from 17.9 billion estimated last year and an original price tag of 15 billion in 2012.

Statoil expects the technology to boost recovery rates from Mikkel to 84 percent from 59 percent and from Midgard to 87 percent from 67 percent.

Statoil has also installed a subsea gas compressor at the Gullfaks field, scheduled to start operating in the fourth quarter. It is expected to add 22 million barrels of oil equivalent of gas (3.3 bcm) to total output from the field, boosting recovery rate from 62 percent to 74 percent.

Royal Dutch Shell in April dropped plans to install subsea compression at its North Sea Ormen Lange field, blaming rising costs and complexity.

($1 = 8.1736 Norwegian crowns)

(Reporting by Nerijus Adomaitis; Editing by David Holmes)

Copyright 2016 Thomson Reuters. Click for Restrictions.


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