Ormen Lange Nyhamna

Royal Dutch Shell has announced the postponement of a Norwegian subsea gas project because of increasing costs and complexity.

Shell said on Friday it would not be providing subsea compression at the North Sea’s Ormen Lange, the second-biggest Norwegian gas field, despite the objections of a key licence partner.

According to the company, it will not reassess the decision for several years, until it has new technology and reservoir information.

In order to save on rising costs in Norway’s vast offshore oil sector and earn more cash for dividends, major developments are being cancelled or delayed by various oil firms.

Although Shell gave no cost estimate, a subsea compression project by Statoil at the Aasgard field is estimated to cost Nkr15bn ($2.5bn).

Ormen Lange is more complex because waters are deeper and there would be no platform nearby to supply power and other equipment.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.
"To save on rising costs in Norway’s vast offshore oil sector and earn more cash for dividends, major developments are being cancelled or delayed."

Ormen Lange management committee chairman Odin Estensen said the oil and gas industry is witnessing a cost challenge.

Norwegian oil services firm Aker Solution designed and built the compression-pilot project for the field, hoping Shell and its partners would use the technology.

Ormen Lange partners Statoil (25.4%), Dong Energy (14%) and Exxon Mobil (6.3%) supported the delay, but Norway-based Petoro (36.5%) opposed it.

The gas field is situated 120km north-west of Kristiansund, where seabed depths vary between 800m and 1,100m.


Image: Ormen Lange natural gas field on the Norwegian continental shelf. Photo: courtesy of © Norsk Hydro ASA 2002

Energy