Statoil Orders New LNG Carrier

A vessel to ship liquefied natural gas (LNG) from Snohvit has been ordered from Leif Hoegh & Co and Mitsui OSK Lines by Statoil and five of the other licensees in the Barents Sea field.

The contract commits Hoegh and Mitsui to provide a carrier able to load up to 145,000 cubic meters of LNG. It will be built by Mitsubishi Heavy Industries in Japan, and the investment is in the order of NOK 1.5 billion. Statoil and its partners Amerada Hess, Norsk Hydro, RWE-DEA, Svenska Petroleum and Petoro are also due to place a contract for two additional ships with another shipping company.

These contracts are conditional on official approval of the Snohvit development. Licensees TotalFinaElf and Gaz de France intend to lift their share of the gas with their own vessels.

Roughly 70 LNG cargoes are due to be shipped annually from the field's planned land terminal at Melkoya near Hammerfest in northern Norway. Existing gas sale agreements involve the annual export of 2.4 billion cubic meters of gas to customers in the USA and 1.6 billion cubic meters to Spain. All three vessels will be fully committed to Snohvit for 20 years from the start of production in 2006, and the contracts include options for extensions.

Shipment in liquefied form represents the fastest-growing method of gas transport worldwide. Well over 120 LNG carriers are currently in service, with many more under construction. The technology chosen for the cargo tanks was developed by Norway's Kvaerrner group in the 1970s, but the Snohvit carriers will be adapted to North Atlantic climatic and environmental conditions. "This will include a hull specially designed for working in these waters during every season over many years," says Otto Granli, vice president for gas sales and shipment in the Snohvit project. "The carriers will also satisfy stringent safety and environmental requirements."