The Barents Sea is estimated to hold around 40 billion barrels of oil equivalent, and Norway is in the process of opening-up this ‘last frontier’ petroleum province for development.
Statoil forecasts that European natural gas demand will steadily rise to around 750 billion cum/yr by 2020, from around 500 billion cum/yr at present, as traditional supply and indigenous production taper off. Hans Gjennestad, Statoil’s head of strategy for the Barents Sea, said one or two pipelines would first be constructed to connect western Barents gas finds to Europe through Ormen Lange’s Langeled system, or the Asgard network.
While Gazprom’s 3.2 trillion cum Shtokman gasfield in the Russian Barents Sea will probably be developed into a LNG project in the first phase, later phases may also include piped gas, he said. A pipeline will then connect into Russia’s Northern European pipeline which, when constructed, will feed into Germany via the Baltic Sea. In addition, Statoil foresees pipelines connecting Shtokman gas to the Norwegian Barents Sea pipe network.
Meanwhile, Statoil is developing its 190 billion cum Snoehvit gasfield off the coast of northern Norway into an LNG project. With the growth of the global LNG market, pipeline and LNG options give the company arbitration opportunities to sell its gas at the best possible price, Gjennestad said. “The Barents Sea will emerge as Europe’s leading oil and gas province,” he said.
The company is currently conducting a two-well exploration campaign in the Barents, in two blocks called Area F and Area G. If the prospects find commercial discoveries, then Area F will be tied-in to the Snoehvit project, with the hopes of funding a second LNG processing train, and Area G would be linked to a new gas-processing facility at Kirkenes, a northern Norwegian coastal town.
