Norsk Awards Steel Contracts for Omen Lange Pipeline

The Ormen Lange license group has awarded steel contracts for the Ormen Lange pipelines to Europipe Gmbh, and Mitsui & Co Norway A.S. and Sumitomo - valued, respectively, at US $434 million and US $265 million. The contracts comprise 1 million tons of line-pipe steel for the export pipeline from Nyhamna to Easington in England, as well as both the two pipelines from the Ormen Lange Field to the Nyhamna Terminal. This export pipeline will be the world's longest subsea pipeline with a total length of about 1,200 km, transporting gas in a 42" pipeline from Nyhamna in Mid-Norway to Sleipner and a 44" pipeline from Sleipner to Easington on the east coast of England. Two 120 km, 30" pipelines will transport gas from the Ormen Lange Field to the Nyhamna Terminal. In total, Ormen Lange will demand a third of the world's production capacity for large diameter line-pipes.

Hydro is operator for Ormen Lange during the development phase, including all field development, the onshore gas processing plant at Nyhamna, as well as the export pipeline project.

Statoil has the project management of the gas export pipeline project in cooperation with Hydro. The contracts are based on Statoil's frame agreements for line-pipes.

The contract awards are conditional on the Plan for Installation and Operation (PIO) and the Plan for Development and Operation (PDO) with submittal in the fourth quarter of 2003, and subsequent governmental approval of the plans.

The pipeline leg from Sleipner to Easington is planned to be ready for operation by October 2006. Production start of the Ormen Lange field is planned for October 2007. In addition to the Ormen Lange partners, ConocoPhillips will also be an investor in the export transport system. When completed, the new export pipeline from Nyhamna via Sleipner to Easington will be part of Gassled and operated by Gassco.

Ormen Lange is the largest gas field under development on the Norwegian continental shelf. It is located 100 km off the northwest coast of Norway at a water depth of 800 to 1,100 meters. The planned gas export volume to England is about 20 percent of Norway's gas exports and 20 percent of UK gas market demand.

Partners in the Ormen Lange license are Norsk Hydro (17.956 %, Operator development phase); Shell (17.2 %, Operator production phase); Petoro (36 %), BP (10.888 %); Statoil (10.774 %) ExxonMobil (7.182 %) .
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