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Bloomberg: Norsk Hydro, Partners to Invest NK2.5 Billion at Ormen Lange

By Beate Evensen

March 9 (Bloomberg) — Norsk Hydro ASA, Norway’s second- largest oil producer, and its partners at the Ormen Lange gas field offshore Norway will invest 2.5 billion kroner ($404 million) to develop a subsea compression station at the deposit.

The station, which would be placed at a depth of 860 meters (2,800 feet), may halve the development and operation costs compared with a traditional platform solution, Hydro said in a statement on its Web site today.

The gas from Ormen Lange, whish is set to start production later this year, will initially be pumped straight from the field via pipelines to an onshore processing facility. After a few years, the pressure in the reservoir won’t be strong enough to transport the gas to shore, making it necessary to install a compression facility at the field.

“If we succeed with this project, we will be able to replace a 25,000-ton platform with a subsea installation weighing around 3,500 tons,” Tom Roetjer, Hydro’s project manager for Ormen Lange, said in the statement. “This is a solution which will mean a great step forward for the oil industry.”

Work to develop the subsea compression station began in 2003, and a test period in an onshore pool will start in 2009, Hydro said. A decision regarding whether a platform or subsea station will be built for compressing the gas will be taken in 2011.

Installation on the field is planned for around 2015, depending on the pressure in the gas reservoir, Hydro said.

Hydro holds 18 percent of the Ormen Lange licenses and is operator during the field’s development. Royal Dutch Shell Plc holds 17 percent, Statoil ASA owns 11 percent, Dong Energy A/S holds 10 percent, Exxon Mobil Corp. has 7 percent and Norway’s state-owned Petoro AS holds 36 percent.

To contact the reporter on this story: Beate Evensen in Oslo at [email protected]

Last Updated: March 9, 2007 02:56 EST

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