Langeled development below budget

ORMEN LANGE GAS: The Langeled pipeline and receiving facilities in Easington are part of the Ormen Lange project, operated by Hydro in the development phase.

(2006-08-23) The construction of the 1,200 km long pipeline between Norway and UK will soon be completed - NOK 3 billion below budget. In just one month's time, Norwegian gas will arrive in Easington via the southern end of the Langeled pipeline - the world's longest subsea pipeline - as it begins to supply the UK with up to 20 percent of its future gas supplies.

– Thanks to good project management, project execution and hitting the market at a good point of time, the Langeled development is due to be completed about NOK 3 billion below budget and Ormen Lange on budget, Hydro's project director Tom Røtjer said to a large crowd of journalists at the ONS conference in Stavanger on Wednesday. Hydro is the development operator for the Ormen Lange/Langeled project, while Statoil has the management of the Langeled project in cooperation with Hydro.

BELOW BUDGET: At the ONS conference in Stavanger on Wednesday, project director Tom Røtjer confirmed that the Langeled pipeline will be completed about NOK 3 billion below budget. The Ormen Lange project will be completed on budget.

The Langeled pipeline and receiving facilities in Easington are part of the Ormen Lange project, the largest gas field under development on the Norwegian continental shelf and what is currently one of the largest engineering projects taking place in the world. The project – developed by Hydro and its partners, is now 80 percent complete and is moving ahead on schedule.

Some of the world’s largest pipelaying vessels are involved in the laying of the 100.000 pipes it takes to make the longest subsea pipeline in the world – 1,200 km long – from the onshore processing plant at Nyhamna in Norway to Easington on the East coast of UK.

Pipelay barge Acergy Piper has now laid about 400 km of the Northern section of Langeled, and with the help of Solitaire, the whole pipeline will be completed this fall. These days Solitaire is completing the installation of the pipelines from Nyhamna to the Storegga slide area, and S7000 is completing the deepwater installation part.

At Nyhamna, the main activity is installation of the huge prefabricated racks and pipes, with about 3000 workers in full swing most of the time. The construction and installation of pipelines, pipes, cables and equipment will continue throughout 2006, while in 2007 the main task will be to test out the equipment, before starting production in the autumn.

With gas reserves close to 400 billion cubic meters and development costs of about NOK 66 billion (USD 10 billion), the Ormen Lange field ranks as the largest development in the European offshore arena.

FROM NORWAY TO THE UK: The Ormen Lange gas pipeline is the longest subsea pipeline in the world.

The two first remotely controlled subsea production stations are installed located 120 km from shore at 850 meters water depths – making Ormen Lange one of the world's largest and most advanced subsea to shore development.

From these stations, two 30-inch pipelines will transport the well stream to the onshore plant at Nyhamna at the coast of Mid-Norway for processing. The pipelines are laid across extreme irregular seabed with boulders and slide blocks up to 60 meters heights in the Storegga slide.

Furthermore, the pipelines are crossing the slide with an inclination up to 40 degrees. Nexan's Spider – a newly developed, remote-controlled excavator – has been preparing the seabed for the passage of the pipelines over steep slopes and very uneven terrain far below the surface of the sea.

The special water current condition gives water temperatures as low as minus 1 Celsius. Such extreme temperature conditions combined with high pressure can cause gas and water to form hydrates and ice, which again can form plugs in the pipelines. The subsea system has been designed to avoid hydrates.

When production from the Ormen Lange field starts in fall 2007, some 70 million cubic meters of gas, a volume comparable to Norway's entire daily energy consumption, will flow through the Langeled pipeline.

	"Active part at ONS"

Facts about Hydro, Ormen Lange and the Langeled project

• Partners in the Ormen Lange field are Hydro, Shell, Petoro, Statoil, Dong and ExxonMobil. Hydro is the operator in the development and construction phase.
• Shell will take over as operator when Ormen Lange comes on-stream. Shell is also responsible for drilling of the production wells.
• The participating interests in Langeled Joint Venture are Hydro, Petoro, Statoil, Dong ExxonMobil, ConocoPhillips and Gassco. Hydro is lead operator for Langeled in the development and construction phase.
• Gassco will take over operation of Langeled from the start of operations. The operator has organised a common project for execution of the transportation system and the field development to secure the integrity of the Ormen Lange and Langeled project from reservoir to market.
• Statoil has the management of the Langeled project in cooperation with Hydro. The project organisation is staffed with personnel from both Statoil and Hydro.
• Ormen Lange, which is in the North Sea off the coast of Norway (some 900 metres below the sea's surface), will be the second largest gas field on the Norwegian continental shelf and will be a major new gas source for Europe from 2007. Gas processing from Ormen Lange will take place at Nyhamna in Mid-Norway and be supplied to the UK.
• Nyhamna, in the municipality of Aukra in Norway, is located on the MidWest coast of Norway and will in 2007 be linked to Easington via the Langeled Project, the 1,200 km pipeline that will link Nyhamna to Easington via the Sleipner node in the North Sea.
• With supplies running short, up to 20 per cent of the UK's gas will be supplied via the Ormen Lange/Langeled project, meeting demand here and across Europe and enabling the safe supply of gas for the next several decades.
• Today Norway is the world’s third largest gas exporter, after Russia and Canada. When the Ormen Lange field comes on stream, Norway will become the world’s second largest exporter of gas.