Hydro Ready with Vega Plan

On Friday, Hydro and its partners submitted the Plan for development and operation (PDO) of the Vega and Vega South fields to the Norwegian Ministry of Oil & Energy. "This plan is an important part of our effort to further develop Hydro's activities in this part of the North Sea, where the company already has production from the Troll, Fram and Fram East fields," says Hydro director Lars Christian Alsvik.

The Vega plan calls a subsea development some 80 kilometers west of Floro in Sogn og Fjordane, in blocks 35/8 and 35/11 in the North Sea. The water depth on the field is about 380 meters.

The development includes three well templates on the seabed. Two of the subsea well templates will be tied into the Vega North and Vega Central structures, part of license PL 248 (Vega). The last template will process the wellstream from Vega South (PL 090C).

The development entails investments valued at some NOK 6 billion in subsea facilities, pipelines and production wells.

In addition, the Vega partners have contributed NOK 1.9 billion to the Gjoa project. The amount is an advance for costs associated with the fact the Vega wellstream will be processed on the Gjoa platform.

Mutual benefit

The Vega gas and condensate field was proven through the Camilla (1980), Belinda (1982) and Fram B (1987) finds. The fields were long considered commercially unfeasible. Hydro took over as operator in 1999 and has placed a lot of emphasis on developing a profitable solution for the shareholders on the two licenses.

"One of the reasons we have found a commercially feasible development solution for this project is partly because gas prices are high and technology has developed to the point that it is feasible to transport the gas, condensate and water on marginal fields over long distances to a process facility," says Lars Christian Alsvik, head of Hydro's Development Norway business sector.

"Several development solutions have been evaluated during our work with the plan, but the partners ended up with a solution where gas and condensate from Vega is sent through a pipeline to the Gjoa field with a combined length of 51 kilometers. The coordinated development of the Vega fields and Gjoa field provides mutual benefit for the partnerships on the two fields," Alsvik says.

The PDO for the Gjoa field was delivered at the same time as the Vega plan.

Hydro is already producing oil and gas from the Fram and Fram East fields in this part of the North Sea. In addition, the company has proven hydrocarbons in the Aurora and Astero finds. Recently, a new Astero well was drilled, and different development solutions for the find are now being evaluated. Hydro has also proven gas in the Peon find, north of Vega.

"We have several interesting and demanding tasks ahead of us in this area. In addition to the finds we have already made, Hydro plans to drill an exploration well in the H-North prospect in 2007," says Alsvik.

The development plan for Vega also includes an eventual extension with a tie in to the Aurora field (PL195).

Start up in 2010

Production on Vega is planned to start on October 2010. The total recoverable resources on the field are about 18 billion standard cubic meters gas and 26 million barrels of condensate.

At its highest peak, production will reach some 7 million cubic meters of gas and 25,000 barrels condensate per day.

Two production wells will be drilled at each of the three well templates. Each well template will have space for two additional wells, if there is need later for additional production wells or the phasing in of nearby resources.

Gas from Vega will be exported via the Gjoa field through a new gas pipeline that will be connected to the British FLAGS pipeline to St. Fergus in Scotland.

The condensate will be transported to the Mongstad refinery through a new oil pipeline from Gjoa that will be tied into the Troll Oil Pipeline II.

License holders on the Vega Field in PL 248 are Hydro as operator with 40%; Statoil with 20% and Petoro with 40%: License holders on the Vega South field in PL 090 C are Hydro as operator with 25%; Revus Energy with 25%; Statoil with 20%; Idemitsu Petroleum Norge with 15%; Gaz de France Norge with 15% and Petoro with 40%.

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