Snohvit Development Delayed by Protesters

Protesters have started a second week of actions against Statoil's Arctic Snoehvit gas project, forcing temporary halts in the already delayed project. A Statoil spokeswoman said 17 members from environmental group Natur og Ungdom had boarded a barge which transports equipment to the Melkoya island outside the town of Hammerfest, causing delays while police worked to remove the protesters. "It has been going on for more than a week now and we have lost three to four days of work in total," Statoil spokeswoman Else Kathrine Nesmoen said.

Last week protesters chained themselves to machinery to halt the 46 billion crowns ($6.20 billion) liquefied natural gas (LNG) development of the Snohvit sub-sea tie-back in the Arctic Barents Sea with onshore processing facilities at Melkoya. Police removed the protesters after a couple of days. "We estimate that this costs us about five million crowns a day," Nesmoen said. "We still aim to keep our deadlines, but every day counts as this project has been much delayed already."

Environment group Bellona caused a three-month delay earlier this year after complaining to a European competition watchdog about a special tax regime granted to Snohvit to boost profitability in the project. Oslo finally got acceptance after redefining the tax regime as regional development to its little populated northern tip, but Statoil said at the time that Snohvit was walking on a knife's edge due to the delays. It is estimated that Snoehvit will come on stream by 2006 and have signed contracts to ship a total of 2.7 billion cubic meters of gas to El Paso and Iberdrola.

Gaz de France and TotalFinaElf have additional contracts to take a total 1.7 bcm from Snohvit and transport the gas on their own vessels.

Protesters from Natur og Ungdom were pleased with the delays caused at the Melkeoya site and hinted that there would be more trouble coming Statoil's way. "We will not surrender in the fight against the opening of the Barents Sea to petroleum activities," Natur og Ungdom's deputy leader, Ane Hansdatter Kismul, said. Kismul said she was afraid of the consequences the Snohvit development would have on the fragile Arctic ecosystem, adding that she saw Snohvit as the first step towards a full opening of the Barents Sea to oil and gas activities. "Several oil companies aims for oil exploration in the region and are waiting to present their plans next year," she said.

Statoil holds a 22.29 percent stake in Snohvit, while the Norwegian state holds 30 percent, Norsk Hydro holds 10 percent, TotalFinaElf holds 18.40 percent, Gaz de France 12 percent, Amerada Hess 3.26 percent, RWE-DEA and Svenska Petroleum each hold 1.24 percent.