Tampen Link Gas Pipe Ready for Operation

OSLO Oct. 11, 2007 (Dow Jones Newswire)

Norway's gas network operator Gassco said Thursday the new Tampen Link pipeline shipping Norwegian gas to the U.K. is ready for operation and should start flowing gas later on today.

Gassco spokesman Kjell Varlo Larsen said: "The pipeline is ready for operation, there are only some (small) procedures to complete. We hope there will be gas flow this afternoon or this evening, it depends on the production side now."

A U.K.-based trader estimated that flows from Tampen would reach the U.K. Friday if the pipe starts as planned later Thursday. He added that Tampen flows have the potential to ease tightness in the U.K. market caused by ongoing U.K. continental shelf maintenance, if they're of reasonable volume.

Low Barrow and Teeside flows, the latter affected by glitches at Armada, had contributed to the tight system, he said, adding, "there's still a lot of upside risk to prices if flows from (Netherlands to U.K.) BBL pipeline remain low."

The day-ahead and working-days-next-week contracts traded at 38.5 pence a therm at 0800 GMT, slightly below within-day prices which dipped to 39.25 pence a therm from earlier levels of 41.5p/th.

The 25 million cubic meters of gas a day Tampen pipe was due online on Oct. 1, but has been the subject of a series of delays due to ongoing technical challenges.

Tampen Link, which is 23.1 kilometer-long, will ship gas from StatoilHydro's ASA (STO) Statfjord B field on the Norwegian continental shelf to the U.K. Flags pipeline and onto Scotland's St Fergus gas receiving terminal. The pipe cost 1.5 billion Norwegian kroner ($276 million).

The Statfjord late life project has reduced pressure in the field's reservoirs, enabling large volumes of previously injected gas - to maintain reservoir pressure and boost oil recovery - to be recovered. The project has improved recovery rates from the field to almost 75% from 54%, keeping it onstream until 2019.

It is currently an oil field with associated gas output, but will switch to being a gas field with associated oil.

Partners in Tampen Link are StatoilHydro with 54.4%, Exxon Mobil Corp (XOM) with 18.2%, Royal Dutch Shell PLC (RDSB.LN) with 12.2%, ConocoPhillips (COP), with 8.2% and Norway's state-owned oil company Petoro, with 7%.

Copyright (c) 2007 Dow Jones & Company, Inc.

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