Norsk Awards Pipeline Installation Contracts for Ormen Lange

The Ormen Lange license group awarded pipeline installation contracts to Stolt Offshore AS and Allseas Marine Contractors S.A. valued, respectively, at approximately NOK 2 billion and NOK 1.5 billion, including options.

Stolt Offshore AS has been awarded installation of 540 kilometers of the 44" pipeline starting from Sleipner towards Easington, UK, with an option in 2006 to install 362 kilometers of the 42" pipeline starting outside Nyhamna to Sleipner.

Allseas Marine Contractors S.A. has been awarded installation of 33 kilometers of the field development's two 30" pipelines and the 42" pipeline to be installed near-shore Nyhamna, with an option to install an additional 61 kilometers of the two 30" pipelines to the Ormen Lange Field.

The contract award to Allseas Marine Contractors S.A. also includes installation of the 44" pipeline at the UK landfall, Easington, with an option to install 228 kilometres of the 42" pipeline starting from Sleipner in the North Sea to Nyhamna on the coast of mid-Norway.

The last ten days, the Ormen Lange license group has awarded contracts valued at more NOK 10 billion related to the Ormen Lange pipeline system. This export pipeline will be the world's longest subsea pipeline with a total length of about 1,200 km.

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 pipeline installation. 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.

Parnters in Ormen Lange 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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