Hydro President Urges Swift Resolution to UK/Norway Treaty

Hydro president and CEO Eivind Reiten today reiterated hope that energy ministers from the UK and Norway will soon reach an agreement on a joint energy treaty - allowing construction of a new gas pipeline from the Norwegian offshore sector to southern England.

"Before the PDO (Plan for development and operation) for Ormen Lange can be sent to the Norwegian authorities, the two governments must reach an agreement on a new UK/Norwegian energy treaty," Reiten told participants at the 12th Annual European Gas Conference in Oslo, hosted by the Norwegian Petroleum Society.

"Given the UK's rising import requirements and the fact that Norway is the closest supply option, getting Ormen Lange in place as soon as possible should be in everyone's interest. Therefore, we expect that the treaty issues will be settled within the necessary deadlines, without jeopardizing Ormen Lange's schedule."

Hydro and its partners on the Ormen Lange gas field development project include in their proposal the construction of a new gas pipeline from the Sleipner field in the Norwegian offshore sector to Easington/Dimlington in southeast England.

The development team had originally planned to deliver the PDO in June. The plan now calls for delivering the PDO in the fourth quarter 2003.

Talks between Norway's Petroleum and Energy Minister, Einar Steensnaes, and his UK counterpart, Brian Wilson, ended in March without an agreement. They are scheduled to meet again in June.

Disagreement reportedly revolves around three points: legal conditions for a new pipeline, getting unprocessed Norwegian gas delivered to UK facilities (instead of processing in Norway), and using the UK's existing pipeline system (instead of building a new pipeline).

Also speaking at the conference, Steensnaes expressed the willingness of both parties to resolve the issue as expediently as possible.

"I have great confidence in the two ministers to sort this out," commented Reiten during a question and answer round after his presentation. "This is gas that's needed in the UK.

He was backed by Malcolm Brinded, a member of the committee of managing directors at Royal/Dutch Shell, production operator on Ormen Lange. "Shell strongly supports a joint framework treaty between the UK and Norway. This is what is needed in other countries as well in the future on a much larger scale."