Caracas July 2005 Snøhvit LNG Project: Europe s First Base-load LNG Production Roy Scott Heiersted Statoil ASA
2 Snøhvit - opening the Barents Sea Strategic project: First offshore in the Barents Sea First LNG production in Europe New gas markets for Norway Environmental focus Industrial experience in Arctic. Snøhvit
Technology for Snøhvit in the Barents Sea Key technology research and development since the 1980s 3 Statoil is a Technology Locomotive for Norwegian Industry and Research Results are - State-of-the-Art technologies - International recognition - Industrial products and methods Snøhvit license owners now benefit from results of Statoil s achievements in innovation.
4 Snøhvit - novel subsea design Located 150 kilometers offshore in 350 meters water depth North Sea achievements are extended in Snøhvit design: Complete subsea systems Multiphase transportation Comprehensive corrosion and hydrate systems Remote control from shore No platforms or manned operations offshore
5 Snøhvit - complex land facility design Offshore flow assurance systems and gas processing plant Several first technologies in the Snøhvit land facility design: Flow assurance systems for subsea is located onshore Environmental protection investments made New LNG process technology selected First European base-load LNG production
Snøhvit subsea production system 15 years development of the optimal well-head system 6 Standardized components Standardized operation Standardized maintenance. 10/29/2002 14 The Snøhvit offshore area design with production pipelines and service lines Remote operations by umbilical system Well-head template production system.
7 Snøhvit multiphase flow design 25 years to develop State-of-the-Art methods and know-how Liquid Ratio (bbls/mmscfd) 70 60 50 40 30 20 10 0 Popeye Malampaya Midgard EM East Spar North Alexandra TOGI Troll Western Hub Mikkel West delta Corrib Mensa 0 50 100 150 200 Transfer lenght (km) Goldeneye Legend Red:Statoil operated Operating Construction/planned LIMIT OF INDUSTRY EXPERIENCE Snøhvit Kudu Snøhvit streches present international practice by 50 % distance on complex multi-phase fluids: From 100 km to 150 km Rigorous dynamic simulation tools (OLGA) Large scale flow experiments (Tiller loop) Corrosion and hydrate field experiments Step-by-step implementation in Statoil fields.
Snøhvit LNG process design 20 years of Statoil LNG R&D creates international competition 8 NG Pre-cooling Section E1A E1B C1 CW1 Statoil LNG R&D, 1984-2004 12 Ph.D.s in LNG related topics at the Norwegian Institute of Technology Liquefaction Section E2 Sub-cooling Section E3 LNG G X1 C2 C3 CW 2A/B CW 3A/B The MFC LNG process design patented by Statoil and Linde in 1997 was selected by the Snøhvit partners in 2000. State-of-the-Art process design: MFC liquefaction process efficiency; Specific Compressor Power: = 230 kwh per ton LNG
Snøhvit - regional challenges 9 Arctic climate at 70 o -80 o North World s largest pelagic fishery Positive stakeholder response Co-existence in a sensitive arctic environment have to be based on a win-win situation Focus on environment is sustainable development
Snøhvit - project execution strategy Site conditions require a novel construction method 10 Site conditions in northern Norway, at the shores of the Barents Sea, requires specific attention to: - Arctic weather conditions - Lack of regional infrastructure - Long logistics chains for both personnel and materials. Snøhvit
Hammerfest City and the LNG Plant - how to develop industry in a remote region 11 Airport LNG plant Hammerfest Offshore base Hammerfest City have 9000 inhabitants Limited industrial activities in the region Restricted communication infrastructure.
12 Pre-fabrication - a Jig-Saw puzzle The pre-fabrication strategy involves a broad specter of European fabrication yards in a logistic link of pre-fabricated systems and units.
13 Site construction a green field plant from 2002 to 2004 Starting from a green field island in the Arctic north, in summer 2002 Making an LNG plant develop in the next 28 months from the first rock blasting.
Income and taxes - investments and manning Production during 25 years: Income 300 billion NOK Taxes 75 billion NOK 14 Project development (1997-2006): Investments 51 billion NOK 30 000 engineering man-years 51% Norwegian contracts 1500 persons at Melkøya on peak Operation from 2007: 160 employees in operation organisation Approximately 350 man-years indirectly.
Regional and local deliveries Snøhvit contract strategy reflects a social responsibility 15 Investment contracts aggregated per 2004: International contracts 49 % Norwegian contracts (national) 51 % Part of overall investments: Northern Norway (regional) 8.5 % Hammerfest/Alta (municipality) 5.5 % Nearly 15 % is regional and local deliveries
Snøhvit - major milestones From parliament approval to first gas to plant in 48 months 16 March 2002: Norwegian Parliament approval July 2002: Construction work starts on land July 2005: Major hook-up of process systems February 2006: First natural gas to LNG plant October 2006: First commercial LNG delivery
17 Snøhvit - LNG market outlets 1.8 mtpa to Cove Point terminal, USA 1.2 mtpa to Iberdrola, Spain 1.3 mtpa equity gas to GdF and Total.
18 Statoil at a new frontier in the Arctic Milestone project for the Norwegian Continental Shelf Closing remarks State-of-the-Art technologies Arctic frontier complexity Environmental agenda New market opportunities. Snøhvit is viable investment and experience