Shell: Norway's Ormen Lange Field Remains Offline

OSLO Dec 03, 2007 (Dow Jones Newswires)

Norway's giant gas field Ormen Lange is still off-line Monday, its new operator Royal Dutch Shell PLC (RDSA) said, but testing is taking place on the repaired compressors and the field is expected to be up and running again "soon," a spokeswoman for the company said.

"The plant is still down, we have been doing the repairs on the compressors and we have now started testing them so hopefully we'll be up again soon," said Shell spokeswoman Lillian Aasheim.

Ormen Lange closed Nov. 30 due to leakages in more than one of the compressors at the field's onshore processing plant located at Nyhamna in mid-Norway. There are three export compressors and two re-compressors and it was suspected all of them could be affected by the problem detected, so they were taken out of service for checks and repairs to ensure safety at the plant, Aasheim said.

The field currently has three wells in operation each with a maximum capacity of 10 million cubic meters a day. Gas flows through the northern spur of the Langeled pipeline to Sleipner gas processing hub in the North Sea and on from there to either European gas markets or to the U.K. through the southern leg of Langeled.

A U.K.-based gas trader at a European utility said the continued shutdown, "caused the system to be short (of gas) this morning, which gave prices support for a bit, but the bear trend is too strong and it has all come down in the last half hour." Unusually mild weather for the time of year recently has prompted a big fall in U.K. gas prices. "No one will make any fuss about low Ormen Lange flows until the cold weather hits," he said.

Another U.K. gas trader said Langeled is currently flowing at a rate of 25 million-30 million cubic meters a day, up from significantly lower levels over the weekend. Prior to the Ormen Lange outage, Langeled had flowed a daily average of around 45 million cubic meters.

Norway's gas network is relatively flexible so lost flows from one part of the system can sometimes be offset by ramping up flows from other fields.

Ormen Lange is located in the Norwegian Sea around 120 kilometers offshore and is Norway's second largest gas field.

It will have a plateau capacity of 70 million cubic meters of gas a day, and 50,000 barrels of condensate when more wells have been drilled at the field.

Gas production from the field began in September. The field will eventually produce from 24 subsea wells with varying output capacity.

Shell took over the operatorship of Ormen Lange Dec. 1 from StatoilHydro ASA (STO) which has a near 30% stake in the field. Shell owns 17% of the field, Petoro 36%, Denmark's DONG 10% and ExxonMobil (XOM) 7%.

Copyright (c) 2007 Dow Jones & Company, Inc.


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