Polish Company To Increase Production From Norwegian Assets

Polish Company To Increase Production From Norwegian Assets
PGNiG Upstream Norway plans to produce an additional volume of approximately 17.5 billion cubic feet of natural gas this year.

PGNiG Upstream Norway plans to produce additional volume of approximately 17.5 billion cubic feet of natural gas this year. This will allow the company's total production to reach 106 bcf of gas in 2022.

The increased gas production comes from three reservoirs – Skarv, Gina Krog, and Duva. In the case of the first two fields, the increase in production will be possible thanks to the discontinuation of gas injection into the reservoirs.

Gas injections are commonly performed by companies operating on the Norwegian Continental Shelf to accelerate oil production – the injected gas is extracted again at a later stage of the field's exploitation. A decision to cease gas injection means the modification of each field’s Plan for Development and Operation, and therefore requires consent from the Norwegian Petroleum Directorate.

PGNiG Upstream Norway and its license partners have obtained such approvals and as a result, the company will produce an additional over 10.6 bcf from Gina Krog and almost 5.4 bcf of natural gas from the Skarv field by the end of the year.

In the case of Duva, the increase in production is possible thanks to the use of free capacities at the production installation serving the Gjøa field, to which Duva is tied in. The spare capacity will be available until the end of August, when the Nova field, also a Gjøa tie-in, will come online. Until then, PGNiG Upstream Norway plans to produce an additional 1.06 bcf of gas from Duva.

The company estimates that it can produce a total of approximately 17.5 bcf of additional gas from Gina Krog, Skarv, and Duva this year, 15 percent over the forecast. Once the Baltic Pipe pipeline is launched in the fourth quarter of 2022, PGNiG will be able to supply additional volumes from Gina Krog and Skarv to Poland.

In 2023, the company plans to produce 88 bcf of gas. In 2024, the PGNiG Group's output on the Norwegian Continental Shelf may reach 102.5 bcf. The production growth will be possible primarily thanks to the discontinuation of gas injection and extraction of gas that has already been injected.

PGNiG Upstream Norway holds an 11.3 percent interest in the Gina Krog license, an 11.92 percent interest in the Skarv license as well as a 30 percent interest in Duva. The company's license partners are Equinor and KUFPEC in Gina Krog; AkerBP, Equinor, and WintershallDEA in Skarv; Neptune Energy, Inpex Idemitsu Petroleum, and Sval Energi in Duva.

PGNiG Upstream Norway holds interests in 59 licenses on the Norwegian Continental Shelf and produces from fourteen fields. Last year, the company's natural gas production volume was 50.14 bcf, up from 16.95 bcf in 2020.

The dynamic growth was possible thanks to, among other things, the acquisition of all assets of Ineos E&P Norge, including 21 licenses, and other acquisitions from 2017 to 2020 as well as the completion of the development of the Aerfugl field and the start of production from the Gråsel and Duva fields.

“The Norwegian Continental Shelf is a priority area of development of the PGNiG Group's exploration and production operations and plays a very important role in our strategy for diversification of gas supplies to the Polish market. In connection with recent events, including cut off of gas supplies under the Yamal contract, the results of our operations in Norway have gained particular significance. Soon, after the launch of the Baltic Pipe, additional cubic meters of gas extracted by PGNiG in Norway will translate to more energy security for Poland", said Iwona Waksmundzka-Olejniczak, President of the Management Board of PGNiG.

“I would like to thank the license partners of PGNiG Upstream Norway and the Norwegian petroleum administration, without which cooperation production of an additional half a billion cubic meters of natural gas by our Group this year would not have been possible”, she added.

To contact the author, email bojan.lepic@rigzone.com

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