Snøhvit LNG Project

Caracas Caracas JulyJuly 20052005

Snøhvit LNG Project:

First First BaseBase--loadload LNG LNG Production

Snøhvit LNG Project:

Roy Scott HeierstedRoy Scott Heiersted

Statoil ASAStatoil ASA

Europe’sEurope’s Production

RSH Snøhvit LNG Project Caracas July 2005

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.

SnøhvitSnøhvit


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Technology for Snøhvit in the Barents SeaKey technology research and development since the 1980s

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.


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Snøhvit - novel subsea designLocated 150 kilometers offshore in 350 meters water depth

North Sea achievements are extended in Snøhvit design:

Complete subsea systemsMultiphase transportationComprehensive corrosion

and hydrate systemsRemote control from shore

No platforms or manned operations offshore


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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


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Snøhvit subsea production system15 years development of the optimal well-head system

10/29/2002 14

Standardized components

Standardized operation

Standardized maintenance.

The Snøhvit offshore area design withproduction pipelines and service lines

Remote operations by umbilical system

Well-head template production system.


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Snøhvit multiphase flow design25 years to develop State-of-the-Art methods and know-how

Rigorous dynamic simulation tools (OLGA)Large scale flow experiments (Tiller loop)Corrosion and hydrate field experiments Step-by-step implementation in Statoil fields.

0

10

20

30

40

50

60

70

0 50 100 150 200Transfer lenght (km)

Liqu

id R

atio

(bbl

s/MMS

CFD)

Legend Red:Statoil operated Operating Construction/planned

Malampaya

MikkelEast Spar

Goldeneye

Snøhvit

KuduMensa

Popeye

North Alexandra

Western HubEM

TrollTOGI

Midgard

West deltaCorrib

LIMIT OF INDUSTRY EXPERIENCESnøhvit streches present international practice by

50 % distance on complex multi-phase fluids:

From 100 km to 150 km


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Snøhvit LNG process design20 years of Statoil LNG R&D creates international competition

State-of-the-Art process design:

MFC® liquefaction process efficiency;Specific Compressor Power:

= 230 kWh per ton LNG

X 1

N G

L N G

C W 1

C 2

C W2 A /B

E 1 A

E 1 B

E 2

E 3

P re -c o o lin gP re -c o o lin gS e c tio nS e c tio n

L iq u e fa c tio nL iq u e fa c tio n S e c tio nS e c tio n

S u b -c o o lin gS u b -c o o lin gS e c tio nS e c tio n

C W3 A /B

C 1

C 3G

Statoil LNG R&D, 1984 - 200412 Ph.D.s in LNG related topics at the

Norwegian Institute of Technology

The MFC® LNG process design patented by Statoil and Linde in

1997 was selected by the Snøhvitpartners in 2000.


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Snøhvit - regional challenges

Arctic climate at 70o - 80o 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


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Snøhvit - project execution strategySite conditions require a novel construction method

• 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. SnøhvitSnøhvit


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Hammerfest City and the LNG Plant- how to develop industry in a remote region

LNG plant

Airport

Hammerfest

Offshore base

Hammerfest City have 9000 inhabitantsLimited industrial activities in the regionRestricted communication infrastructure.


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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.


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Site construction – a “green field” plant

from 2002

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.

to 2004


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Income and taxes - investments and manning

Production during 25 years:Income 300 billion NOKTaxes 75 billion NOK

Project development (1997-2006):Investments 51 billion NOK 30 000 engineering man-years51% Norwegian contracts1500 persons at Melkøya on peak

Operation from 2007:160 employees in operation organisationApproximately 350 man-years indirectly.


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Regional and local deliveriesSnøhvit contract strategy reflects a social responsibility

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


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Snøhvit - major milestonesFrom parliament approval to first gas to plant in 48 months

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


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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.


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Statoil at a new frontier in the ArcticMilestone project for the Norwegian Continental Shelf

• State-of-the-Art technologies

• Arctic frontier complexity

• Environmental agenda

• New market opportunities.

Snøhvit is viable investment and experience

Closing remarksClosing remarks

Snøhvit LNG Project

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