Ormen Lange PDO & Langeled PIO Submitted to the Ministry

Norsk Hydro - with unanimous participant support in the Ormen Lange license and the Langeled Joint Venture - has submitted the Plan for Development and Operation (PDO) for field development and the Plan for Installation and Operation (PIO) for the transport system to the Norwegian Ministry of Petroleum and Energy.

The Ormen Lange field, discovered by Norsk Hydro in 1997, is located in the Norwegian Sea, 100 km of the northwest coast off Norway. The water depth is 850 to 1,100 meters, making Ormen Lange the first real development in Norway in these water depths. With recoverable gas estimated at 397 billion Sm3 and 28.5 million Sm3 of condensate, Ormen Lange is the second-largest gas field in Norway. Nyhamna, on the west coast of Norway, has been selected as the site for an onshore processing plant. From Nyhamna, the gas will be exported in a new pipeline via the Sleipner riser platform in the North Sea to Easington on the east coast of England.

The total investment cost for the Ormen Lange project development, from reservoir to market, is estimated at NOK approx. 66 billion (2003) approximately 46.5 billion NOK for the field development and approx. 19.5 billion NOK for the transport system. The major part of the investments will take place in 2005 and 2006.

The development plan for the Ormen Lange field offers improved economics when compared with the concept selection basis of a year ago, even though the investment level has increased. This is due to an increase in recoverable reserves, increased production level, higher processing capacity, higher transport capacity and more flexibility in the proposed concept.

Ormen Lange is planned as a subsea development producing directly to Nyhamna for well stream processing, gas compression and condensate offloading to tankers. The annual gas export plateau will be approximately 21 billion Sm3 and the daily export capacity up to 70 million Sm3.

To maintain production when reservoir pressure declines, an offshore compression facility is planned for installation on the field with a planned start-up date in 2016. However, a subsea compression solution will be evaluated, in parallel, as a cost-effective alternative to a compression platform.

The PDO includes two main subprojects:
  • Offshore production system
  • Onshore plant at Nyhamna

  • Partners in the Ormen Lange field are Norsk Hydro as operator for the development phase with 18.0728%; Shell as operator for the production phase with 17.035%; Petoro with 36.475%; Statoi lwith 10.8441%; BP with 10.34205 and ExxonMobil with 7.2286%.

    Hydro is operator for the planning and development phase. Shell will take over as operator when Ormen Lange comes on-stream in October 2007. Shell will also be responsible for drilling of the production wells.

    Subject to the Norwegian Parliament's (Stortinget) approval of the plans, construction work at Nyhamna will start in April 2004.

    The Langeled joint venture, comprising Ormen Lange owners, ConocoPhillips and Gassco, has been established to construct, operate and own the transportation system from Nyhamna to Easington. The planned Langeled Transportation System has a total pipeline length of approximately 1,200 km. It will be the longest subsea gas pipeline system in the world. The southern part of the Transportation System will be operational to transport other Norwegian natural gas in October 2006. The northern leg will be operational in October 2007 when the Ormen Lange field comes on-stream.

    The Transportation System as outlined in the PIO includes:
  • Northern pipeline, 42. diameter from Nyhamna to the Sleipner riser platform
  • Subsea valve station in the Sleipner area, risers and modifications on the Sleipner Riser Platform
  • Southern pipeline, 44. diameter from Sleipner to Easington, England
  • Terminal Easington

  • Hydro is operator of Langeled in the planning and development phase. The operator will organise a common project for execution of the transportation system and the field development to secure the integrity of the Ormen Lange project from reservoir to market. The plan is to include Langeled into Gassled. Gassco will take over operation of Langeled as from start of operations.

    Statoil has the management of the gas export pipeline project in cooperation with Hydro. The project organization will be staffed with personnel from both Statoil and Hydro.

    The participating interests in Langeled Joint Venture are Norsk Hydro as operator for the development phase with 17.553%; Gassco as operator for the production phase with no interest; Petoro with 32.716%; Shell with 16.585%; Statoil with 14.947%; BP with 10.498%; ExxonMobil with 6.922% and ConocoPhillips with 0.779%.

    Ormen Lange will increase Norwegian gas export by 25% to more than 100 billion Sm3 per year and make Norway the third largest gas exporter in the world.

    The Ormen Lange development is the single largest project in Norway. It represents a substantial part of all offshore investments in Norway during the next four years. As many as 16,000 people will be employed directly and indirectly by the Ormen Lange development, including 1,700 working at the Nyhamna site.

    The project and operation will be performed according to high health, environment and safety standards.