StatoilHydro: Ormen Lange Stops Output on Leakage

OSLO Nov 30, 2007 (Dow Jones Newswires)

Gas production from giant Norwegian field Ormen Lange Friday was brought to a complete halt to allow a leakage in the export compressors to be inspected, StatoilHydro ASA (STO) said.

"We had a leakage in some coupling in the compressors, so we stopped production," said StatoilHydro spokesman Dag Ryen Ofstad. "When the export compressors don't work we can't export gas at all."

The export compressors are located at Ormen Lange's onshore processing plant located at Nyhamna, mid-Norway. Ofstad said: "We will be in production from Sunday," after inspection and repair work gas been carried out.

Ormen Lange gas flows through the northern spur of the Langeled pipeline to Sleipner gas processing hub in the North Sea and on from there to either European gas markets or to the U.K. through the southern leg of Langeled.

Ofstad couldn't comment on the precise impact of flows to market, saying only that the northern leg of Langeled is 612 kilometers long, "so there is some gas accumulated there." He said he had "very little knowledge about how this buffer can be used."

Norway's gas network has a certain amount of flexibility, meaning that lost flows from one part of the system can sometimes be compensated by ramping up flows from other fields.

Ormen Lange is located in the Norwegian Sea around 120 kilometers offshore and is Norway's second largest gas field. It will have a plateau capacity of 70 million cubic meters of gas a day, and 50,000 barrels of condensate when more wells have been drilled at the field. Gas production from the field began earlier this year in September. The field will eventually produce from 24 subsea wells.

A U.K.-based gas trader said: "If there are infrastructure problems (at Ormen Lange or) Langeled, and they are serious, it will increase the existing uncertainty about Norwegian flows for the balance of winter."

Langeled has flowed a daily average of around 45 million cubic meters into the Easington gas terminal in the U.K.

Ormen Lange is currently still operated by StatoilHydro, but operatorship will be relinquished to Royal Dutch Shell (RDSA) at 2400 GMT Friday, as previously agreed. StatoilHydro owns around 30% of Ormen Lange, Shell 17%, Petoro 36%, Denmark's DONG 10% and ExxonMobil (XOM) 7%.

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