Skarv Gas Export Solution Selected

The Skarv and Idun partners have reached agreement to export gas via the Gassled system. The agreement is a major milestone in progressing joint development of the Skarv and Idun fields.

Gas from the fields will be exported from 2010 via the existing Norwegian infrastructure system. This will require upgrade of the pipeline running from the Åsgard area to the Kårstø terminal. The agreement is a result of strenuous efforts by BP and partners to align on an export solution for Skarv and Idun gas.

The export solution is subject to the Gassled Joint Ventures concurrence.

"This is very good news for the partnership, and for new activity in the Mid Norway area. Securing the export solution enables us to prepare for the front end engineering in 4Q 2005 by issuing the FEED tender documents today, with the aim of sanctioning field development in 2006. This means that Skarv, which will be developed jointly with Idun, could be on stream during 2010", says Scott Kerr, Managing Director of BP Norge.

Subject to license agreement, the schedule is to submit the Plan for Development and Operations (PDO) to the Norwegian authorities in 4Q 2006, with approval in the parliament expected early in 2007.

The Skarv and Idun fields are to be developed via subsea tiebacks to a Floating Production Storage and Offtake facility (FPSO). The gas will be transported through a new spur pipeline which joins the existing Gassled system in the Åsgard area. Preliminary total investment for the project is estimated to be in the order of NOK 15 billion (excluding cost of Gassled upgrade).

Skarv was discovered in 1998 and is a combined oil and gas development, with 80% of the reserves gas and the remaining 20% liquids. The resource base consists of hydrocarbons from several different reservoirs and structures, including Skarv and Snadd fields. It is located in license PL 212, PL 212B & PL 262 (part blocks 6507/5 & 6507/6, 6507/3, 6507/2). Recoverable reserves (base – Skarv only) 14,8 mmSm3 (93 mmbbls) Oil & Condensate 39,6 bnSm3 (1,4 Tcf) gas. The license owners are: BP Norge AS 30% (operator), Statoil 30%, Norske Shell 25%, ExxonMobil 15%.

Idun was discovered in 1999 and is primarily a gas development. It is located in license PL 159 (blocks 6507/3-3) and gas reserves are 13,5 bnSm3 gas and 0,27 mSm3 condensate. The license owners are: Statoil 50% (operator), Norske Shell 40%, Hydro 10%.

There are two FEED contracts to be issued: One for the FPSO and one for the sub sea systems. The total value is around NOK 100 million. Award is expected 4 Q 2005.