Statoil Negotiating to Save Snoehvit

Statoil is in negotiations with the Ministry of Finance to save development of the Snohvit natural gas field. The Snoehvit project, estimated to cost around 40 billion NOK to develop, will help Norway extend into the fast-growing liquified natural gas market as the country gradually shifts away from oil exports.

"There is a package of several suggestions on the table which still need to be considered," reported a Statoil spokesman. There is not a specific time-frame for the discussions, but both parties want a swift decision.

The Snohvit project, a subsea tie-back to onshore processing facilities with a LNG plant near Hammerfest in northern Norway, would be developed by state-controlled Statoil and other offshore partners.

Snohvit is estimated to hold about 320 billion cubic meters of natural gas at a total value of around 125 billion NOK. But the project was put on hold in July as the consortium found the future tax level of the project was not satisfactorily clarified.