Norway Energy Profile: World’s Third-Largest Natural Gas Exporter – Analysis

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0d515e9bde4e3a378a426bcc13e628c1 Norway Energy Profile: World’s Third-Largest Natural Gas Exporter – AnalysisPlacement of Norway. Source: CIA World Factbook.

Norge is the largest holder of crude oil and raw gas reserves in Europe, and it provides still of the petroleum liquids and natural gas exhausted on the continent. Norway was the third-maximal exporter of natural gas in the world aft Russia and Qatar in 2015.

In 2015, the oil and natural gas sector accounted for well-nigh 40% of Norway’s commodity revenues and more than 15% of the native land’s gross domestic output (GDP).1 Norway’s crude and other liquids production seedy in 2001 at 3.4 million barrels per day (b/d) and declined to 1.8 1000000 b/d in 2013 before growing to slight less than 2.0 trillion b/d in 2015. Natural gas production, on the additional hand, increased nearly every gathering since 1993, except for a diminished decline in year-over-yr production in 2011 and 2013.

Hydropower is the first source of Norway’s excitement supply, accounting for 97% of complete electricity generation in 2014. In Jun 2012, government officials from Norge, Germany, and the United Kingdom habitual their plans for subsea electrical power connections between their state to strengthen the northern European tenseness grid and to increase supply protection. The Norwegian state-owned drive system operator, Statnett, faculty work with the United Dynasty’s National Grid to make the Norway-United Kingdom cablegram connection, expected to be completed in 2021. Statnett faculty also cooperate with Deutschland to build the Norway-Germany chain, expected to be completed in 2019.2

The historic arrangement between Norway and Russia, which outlined their maritime boundaries in the Barents Sea and the Galosh Sea and resolved their 40-yr old boundary dispute, was fully sanctioned by both governments in early 2011 and went into end product in July 2011. As a result of the accord, Norway gained about 34,000 four-sided miles of continental shelf. The arrangement requires the two countries to jointly mature oil and natural gas deposits that crossbreed over their boundary.

Oil and other liquids

Norway is the maximal oil producer and exporter in Western Collection.

According to the Oil & Gas Journal, Norway had 5.14 gazillion barrels of proved crude oil set as of January 1, 2016, the largest oil keeps in Western Europe.3 All of Norway’s oil save are located offshore on the Norwegian transcontinental shelf (NCS), which is divided into deuce-ace sections: the North Sea, the Norwegian Sea, and the Barents Sea. The volume of Norway’s oil production come about in the North Sea. New exploration and production strength is taking place further direction in the Norwegian Sea and the Barents Sea, where diminished volumes of liquids and natural gas are presently being produced.

Sector establishment

Norway’s Ministry of Crude and Energy (MPE) is responsible for overseeing the community’s energy resources. The Norse Petroleum Directorate (NPD) reports to the MPE as an consultant, administers exploration and production movement on the NCS, and collects and analyzes data. Submit-owned Petoro manages the commercial-grade aspects of the government’s business interests in petroleum operations and related activities. Petoro acts as the retailer for production licenses and companies.

The maximal energy company operating in Norge is Statoil ASA, which was created by the coalescence of Statoil and Norsk Hydro in Oct 2007. Norway’s authorities is the largest shareholder of Statoil, owning 67% of the supranational energy company. In addition to its functioning in Norway, Statoil is a major global company, and it has interests in more than 30 state.

Several international oil companies carry a sizable presence in Norway. The Norse government’s subsidy of oil and essential gas exploration, introduced in 2005, refunds 78% of the investigation costs to the companies. In addition, the Norse government reduced taxes on shoreward oil activities and on liquefied natural gas (LNG) shipped abroad, which has attracted additional supranational investment.

Exploration and production

73919e1b4d6a5289711cbd5c19ff5a1e Norway Energy Profile: World’s Third-Largest Natural Gas Exporter – AnalysisIn 2015, Norge produced 1.96 million barrels per day (b/d) of oil and other liquids (Figure 2), 3% higher than in 2014. Norge’s petroleum production has been piecemeal declining since 2001 as oil arable have matured, although yield in 2013 and 2014 increased pretty. The NPD expects that petroleum creation will continue to decline tardily from 2016 through 2019, already beginning to grow again in 2020 as the Johan Explorer field ramps up production.4 The trey largest producing crude and condensation fields in 2015 were Angling (121,000 b/d), Ekofisk (112,000 b/d), and Snorre (110,000 b/d).5 The Angling and Ekofisk fields are located in the Norse portion of the North Sea, where nigh of Norway’s current creation occurs. Snorre field is set a little further north, in the confederate Norwegian Sea.

Overall investment in the oil and commonplace gas industry is declining in response to reduce oil prices. Total investments in oil and habitual gas extraction and pipeline transport in 2015 were Norse kroner (NOK) 195 billion (US $23 jillion), NOK 25 billion lower than in 2014. Additionally, as of Lordly 2016, estimated total investments in 2016 are bounteous than 15% lower than investments in 2015.6 The drop levels of investment are the result of decrease activity and lower costs.

Northerly SeaNorway has been producing oil from the Due north Sea since 1971, and the North Sea all the more accounts for the bulk of Norway’s creation. Although most of the Norway’s Northwards Sea fields are in decline, several meaningful discoveries in the North Sea have been imaginary in recent years. The Norwegian Sevens approved joint development and operational plans in June 2012 for Lundin’s Edvard Composer oil and natural gas field and Det Norske’s Ivar Aasen Area (formerly called Draupne). Estimated to clout 206 million barrels of oil similar, Edvard Grieg began creation in November 2015 and is expected to fabricate 100,000 b/d of oil equivalent at its peak. The about Ivar Aasen field, estimated to influence 183 million barrels of oil similar, will be tied into Edvard Composer and begin producing oil in the fourth stern of 2016.7

The Johan Sverdrup oil field was the maximal oil discovery in the world in 2011, with save estimated at between 1.7 and 3.0 1000000000 barrels of recoverable oil equivalent funds. This field is located 96 miles w of Stavanger in the North Sea. Johan Explorer was initially believed to consist of two meadow four miles apart: Avaldnes, disclosed by Lundin in 2010, and Aldous, observed by Statoil in 2011. Further search activities revealed they fabricate one giant field, renamed Johan Explorer in 2012, when the field associate signed a cooperation agreement that titled Statoil as the operator. Partners again include Petoro, Det Norske, and Maersk. The universe is expected to be a new stand-alone processing and move hub. Production is scheduled to start in behind 2019, eventually reaching a zenith of 550,000 b/d-650,000 b/d, accounting for 25% of the forecasted creation from the Norwegian continental ridge.8

Barents SeaGoliat is the first oil sphere to be developed in the Barents Sea. Discovered in 2000, Goliat’s redeemable oil reserves are estimated at 179 zillion barrels. Eni owns 65% of the nature and is the operator; Statoil owns the left 35%. Eni is developing the field with a tubelike floating production, storage, and offloading (FPSO) rostrum. The FPSO was built in South Choson, shipped to Hammerfest, Norway, and in May 2015 was towed to its journey’s end at the Goliat field, offshore Norge. Production at Goliat began in Butt 2016 and is expected to ramp up to a crown of 93,000 b/d of oil before declining to approximately 30,000 b/d. Goliat has estimated redeemable natural gas reserves of 283 gazillion cubic feet (Bcf). Produced raw gas will be reinjected into the establishment to improve oil recovery.9

Johan Castberg is added recent discovery in Norway’s Barents Sea. The Johan Castberg environment encompasses three finds unreal in 2011, 2012, and 2014. Johan Castberg is estimated to clasp between 400 and 650 meg barrels of oil. Statoil, the operator for the area, was due to decide on a development plan for the world in 2015.10 However, mostly in that of its remote Arctic location, addition of this field will be rather expensive. In March 2015, Statoil proclaimed that it was pushing back its image selection decision to the second one-half of 2016, with an investment accommodation expected in 2017.11

Oil exports

According to Statistics Norge, Norway exported an estimated 1.3 trillion b/d of crude oil in 2015, of which 97% went to Continent countries (Figure 3).12 The top five-spot importers of Norwegian crude oil in 2015 were the Common Kingdom (40%), the Netherlands (26%), Deutschland (9%), Sweden (7%), and Danmark (4%).1abac2e3bafa2c7d5526ef7872d244c8 Norway Energy Profile: World’s Third-Largest Natural Gas Exporter – Analysis

Pipelines

Norway has an extensive web of subsea oil pipelines, with a authority to transport about 1.8 trillion b/d of crude oil and condensate to processing terminals on Norge’s coast.13 Distinct smaller pipelines connect Direction Sea fields to one of the major pipelines. Outstanding offshore oil production is brought inshore by shuttle tanker.

ConocoPhillips run the 830,000 b/d capacity subsea Norpipe, which link Norwegian oil fields in the Ekofisk action (as well as associated fields in both Norse and United Kingdom waters) to the oil terminating and refinery complex at Teesside, Great Britain.14

Brent benchmark crude

A reference crude is a specific crude oil that is everywhere and actively bought and sold, and to which over-the-counter types of crude oil can be compared to impel a price by an agreed-upon calculation. Brent, the most widely old global crude oil benchmark, is calm of four crude oil blends: Goose, Forties, Ekofisk, and Oseberg (BFOE). The Goose and Forties blends are produced seaward in the waters of the United Kingdom, and the Ekofisk and Oseberg meld are mainly produced offshore in the humor of Norway. North Sea Brent natural oil loadings average slightly fewer than 1 million b/d, with the two Norse crude oil streams accounting for some 40% of the total.

The Brent reference was originally based on the output of the Goose field, a single field in the Agreed Kingdom’s sector of the Northwards Sea. However, as production from the Goose field declined, other pasture and blends were added to the reference. Today the Brent benchmark encompasses the cardinal BFOE crude blends, yield of which are also mostly now in downslope. Production and loading of Ekofisk and Oseberg combination crudes have been usually declining in recent years. Flush though the benchmark itself answer for for only a small portion of add world crude oil production, it stiff a key indicator for world crude oil pricing.

Purification

As of the end of 2015, Norway had 346,000 b/d of unprocessed oil refining capacity. The country has two hefty refining facilities: the 120,000 b/d refinery at Slagentangen, operated by ExxonMobil;15 and the 226,000 b/d Mongstad herb, operated by Statoil.16 Nearly of the output from both refineries is exported, and Norge is an important supplier of gasoline and ice fuel to the European Union (EU). Statoil direct the retail products market in Norge, and the company has also expanded into over-the-counter European markets.

Natural gas

Norge is the world’s third-maximal exporter of natural gas after Ussr and Qatar, and the seventh-largest manufacturer of dry natural gas as of 2015.

According to the Oil & Gas Journal, Norge had 68 trillion cubic feet (Tcf) of established natural gas reserves as of January 1, 2016.17 Contempt maturing major natural gas grassland in the North Sea, Norway has sustained wax nearly every year in totality natural gas production since 1993 by chronic to develop new fields.

Sector system

As is the case in the oil sector, Statoil govern natural gas production in Norway. A numeral of international oil and natural gas companies, including ExxonMobil, ConocoPhillips, Sum, Shell, and Eni, have a sizable vicinity in the natural gas and oil sectors in partnership with Statoil.

Submit-owned Gassco is the operator for Norge’s natural gas pipeline above, including the network of international hose and receiving terminals that exports Norge’s natural gas to the United Country and continental Europe. The pipelines are owned by Gassled, a roast venture between the Norwegian regime (46% ownership) and Statoil (5% possession). The remaining 49% is owned by two River pension funds, other institutionalized investors, and private companies.
The River pension funds invested in Gassled in 2011 enceinte moderate but predictable returns, which are general for established pipeline companies. Nonetheless, in 2013, the Norwegian government declared that it would cut the tariff range for natural gas pipelines by 90% as of Jan 1, 2016. The Canadian pension income and some other investors filed a litigation claiming that the tariff simplification was illegal and financially damaging. In Oct 2015, the court ruled fronting the investors. The investors appealed the finding, with the appeal hearing set to establish in January 2017. Norway is loosely a low-risk country for investors, where these classification of disputes are rare.

Production and evolution

Norway produced 4.1 Tcf of dry commonplace gas in 2015, a significant increase upon 2014 (Figure 4). Norge’s largest producing general gas field is Troll, which produced 1.2 Tcf in 2015, representing 30% of Norge’s total natural gas yield that year. The four succeeding-largest producing fields in 2015 were Ormen Photographer (0.6 Tcf), Åsgard (0.3 Tcf), Kvitebjørn (0.2 Tcf), and Snøhvit (0.2 Tcf). These pentad fields accounted for 63% of Norge’s total dry natural gas creation in 2015.18

Norway had eight oil and natural gas ground under development as of September 2016, two of which include significant natural gas reserves.19 The Actor Linge field in the North Sea clasp an estimated 0.7 Tcf of recoverable congenital gas and about 66 million barrels of oil liquids. The Aasta Hansteen sphere is located in the Norwegian Sea, north of the Gumshoe Circle. This field is enhanced than 180 miles from terra firma. The development plan for the field comprise building a nearly 300-mi undersea pipeline to transport customary gas from the field to the Nyhamna commonplace gas processing plant. Aasta Hansteen seize an estimated 1.6 Tcf of recoverable general gas as well as a small volume of liquor. Statoil, the main shareholder and cause of Aasta Hansteen, has also imaginary several smaller discoveries in not far-off fields that could be highly-developed in the future. Both fields are regular to start production around 2018.84a3ffa04828377f69202905e4af7463 Norway Energy Profile: World’s Third-Largest Natural Gas Exporter – Analysis

Exports

Norge exported about 95% of its habitual gas production in 2015. Most of Norge’s natural gas exports were transported to Continent Union (EU) countries via Norway’s encompassing export pipeline infrastructure, and 0.1 Tcf was exported to EU nation as LNG. The remaining 0.1 Tcf went to additional parts of the world as LNG.20

International customary gas pipelinesNorway operates distinct important natural gas pipelines (Defer 1)21that connect straight with other European nation, including France, the United Realm, Belgium, and Germany. These pipe are operated by Gassco. Some line run directly from Norway’s large-scale North Sea fields to processing effortlessness in the receiving country. Other pipe connect Norway’s inshore processing facilities to European Stock Exchange (Figure 5).

Figure 5. Trained and international Norwegian pipelines
4e922a4c75f7acd50bc244c667ab6b26 Norway Energy Profile: World’s Third-Largest Natural Gas Exporter – Analysis

Fountain-head: The Norwegian Petroleum Directorate

Tabularize 1. Norway’s commonplace gas export pipelines

Facility
Eminence
Capacity (trillion cubic feet per gathering)
Total length (miles)
Ancestry
Destination
Details

Norpipe
operational
0.6
280
Ekofisk area
Emden, Deutschland
started operation in 1977

Zeepipe I
operational
0.5
500
Sleipner platform
Zeebrugge, Belgique
started operation in 1993

Europipe I
operational
0.6
390
Draupner platform
Dornum, Deutschland
started operation in 1995

Zeepipe IIA and IIB
operational
1.8
190
Kollsnes gas plant
Sleipner podium (IIA) and Draupner platform (IIB)
started functioning in 1996 (IIA) and 1997 (IIB)

Franpipe
operational
0.7
520
Draupner platform
Dunkerque, France
started operation in 1998

Europipe II
operational
0.8
410
Kårstø gas plant
Dornum, Deutschland
started operation in 1999

Vesterled
operational
0.5
220
Heimdal field
St. Fergus, Scotland
started method in 2001

Langeled
operating
0.9
720
Nyhamna gas flower
Easington, England
started manner in 2007, connects to the Sleipner stand.

Tampen and Gjøa
operational
0.6
14 Tampen and 80 Gjøa
Statfjord and Gjøa ground
connects to the FLAGS pipeline to St. Fergus, Scotland
started transaction in 2007 (Tampen) and 2010 (Gjøa)

Fountain-head: U.S. Energy Information Administration supported on Statoil and Gassco.

Liquefied essential gas

Shipments of Norwegian liquefied accustomed gas (LNG) totaled approximately 198 Bcf in 2015, up from 184 Bcf in 2014. Continent countries received 58% of Norge’s LNG exports in 2015, nearly of which were exported to the Holland (Figure 6).22

Norway’s archetypal large-scale LNG liquefaction installation opened in 2007. Statoil run the LNG export terminal and liquefaction smoothness at Melkoya, Norway, near Hammerfest. The readiness draws natural gas from the Snohvit anticipated gas field, Norway’s low natural gas development in the Barents Sea. The Melkoya absence, the first large-scale LNG exportation terminal in Europe, has a design faculty of 4.2 million metric dozens per year (mt/y) of LNG.

Norway has several little-scale LNG facilities, including iii small-scale liquefaction shrub with a combined capacity to make 0.44 mt/y of LNG. Norway has been at the vanguard of a growing small-scale LNG diligent in the Nordic countries. LNG is distributed by dwarf tanker ships and by tanker commodities to ports and inland facilities in Norge, Sweden, and Denmark. Finland’s basic small-scale LNG receiving last was completed in 2016, and it is scheduled to dawning commercial operations in September 2016. LNG is exclusively used by industrial consumers, and it is more and more being used as marine kindling.663f000660c7934c4ecc69338d800397 Norway Energy Profile: World’s Third-Largest Natural Gas Exporter – Analysis

Hydrocarbon gas liquids

Hydrocarbon gas juice includes both natural gas solution (such as ethane, propane, and butanes) and olefins produced by accustomed gas processing plants, fractionators, natural oil refineries, and condensate splitters. Norge’s growing natural gas creation has resulted in increasing yields of counted on gas plant liquids (NGPL), qualification Norway Europe’s influential producer of NGPL. As natural gas yield has grown in Norway, the quantities of cured NGPL have increased importantly, from 124,000 b/d of oil equivalent in 2000 to 338,000 b/d of oil equal in 2015.23 Most NGPL are produced at the Kårstø processing flower, north of Stavanger, Norway, which can mechanism about 3.1 Bcf per day of wet natural gas and crude condensate that it receives from a numeral of fields on the Norwegian continental ridge, including Åsgard, Sleipner, and Mikkel.24

The big NGPL output of the natural gas processing and fractionation faculty in Norway, particularly at Kårstø, has resulted in the embrasure of Kårstø becoming Europe’s maximal LPG export facility and one of the largest and nigh modern such terminals in the apple. Propane and butane originating at the embrasure move by tanker to destinations sorrounding the world.25 However, piece Norway’s exports of liquified petroleum gas (LPG, a mixture of propane and butane) forge ahead to rise, output of ethane has been inchmeal declining.

Historically, ethane produced at Kårstø was shipped by flatboat to petrochemical crackers at Rafnes, Norge, and Stenungsund, Sweden. The diminishing c2h6 output, however, is no longer enough for Ineos at Rafnes and Borealis at Stenungsund to coerce their plants at full ability. In March 2015, Ineos began commerce ethane from the Sunoco Logistics’ commodity terminal at Marcus Hook, Colony, to their Rafnes plant, where it is victimized as feedstock in the production of ethylene. In Sep 2016, Ineos also began commerce ethane from Enterprise Ware Partners’ terminal in Anthropologist’s Point, Texas.

As of the end of 2016, Ineos had four-spot specially built ethane bearer under long-term lease, and before the end of 2017 the company is anticipated to add another four ethane bearer to its fleet. The ships will transfer ethane between the two U.S. export terminals and Rafnes, as beefy as possibly other European terminus on the North Sea. The export of U.S. ethane to Norge has resulted in a traditional energy exporter fitting a significant importer of ethane from the Coalesced States at an expected rate of all over 25,000 b/d going forward.

Verve

Hydropower accounted for 97% of the tension produced in Norway in 2014.

Electricity propagation in Norway in 2014 was 140 million kilowatthours (BkWh), of which 136 BkWh came from hydropower. According to Statistics Norge, total net consumption of electricity in 2014 was 117 BkWh, active 2% lower than in 2013.26

Roughly 97% of all electricity generation in Norge comes from hydropower. The left over electricity is generated from dodo fuels and other renewables, including draught and biomass. The largest renewable force power generator in Europe is Statkraft, which is owned by the Norse state and is a major supplier of hydropower. Norge’s electric grid is owned and operated by Statnett. Statnett is contracted for ensuring the reliability and efficiency of the tense grid and for balancing electricity utility and demand. The company is owned by the Norse state, and its revenues from operational the grid are regulated by the Norwegian Douse Resources and Energy Directorate below the Ministry of Petroleum and Energy.

In the tardy 1990s, Norway, Sweden, Suomi, and Denmark integrated their excitement markets into a single bazaar for the Nordic region. In 2008, a 0.7 gigawatt content subsea power cable allowing energy trade between Norway and the Holland began operating. In addition, subsea bent cables to connect Norway to Deutschland and to the United Kingdom are currently underneath construction. They are expected to be realized by 2019 and 2021, respectively, and both Testament have transmission capacities of 1.4 gigawatts.27 Norge also has a small interconnection with Rustling in the far north. In 2014, Norway imported 6 BkWh of tension and exported 22 BkWh. Well-nigh of the imports and exports went to or came from Sverige. Trade with the Netherlands and Danmark accounted for most of the remaining imported and exported verve, with only small adds up to traded with Finland and Russian Federation.

Notes:

  • Data presented in the text are the near recent available as of December 28, 2016.
  • Facts are EIA estimates unless otherwise celebrated.

Endnotes:

1Statistics Norway, Governmental accounts and business cycles, Yearly national accounts 2014-2015, accessed Sep 7, 2016.
2Statnett, Cable to the UK and NORD.Nexus, accessed May 27, 2015
3Oil & Gas Journal, “Cosmopolitan Look at Reserves and Production,” (Dec 7, 2015) p. 22.
4Norwegian Petroleum Board, The shelf in 2015 – Petroleum creation, (January 14, 2016).
5Norwegian Petroleum Board, Fact Pages, Monthly Creation – by field, accessed Lordly 18, 2016.
6Statistics Norway, Investments in oil and gas, fabrication, mining and electricity supply, Q3 2016, accessed Sep 6, 2016.
7Lundin Petroleum, Operations—Norway, accessed Sept 6, 2016.
8Statoil, Johan Sverdrup, accessed Lordly 31, 2015 and Lundin Petroleum, Action—Johan Sverdrup, accessed Revered 31, 2015.
9Eni Norge, Goliat Facts, accessed Sep 6, 2016.
10Norwegian Petroleum Directorate, Gospel Pages, Johan Castberg, accessed Venerable 31, 2015.
11Statoil, “New timeline for Johan Castberg and Snorre 2040,” (Marchland 6, 2015).
12Statistics Norway, External business in goods, accessed September 2, 2016.
13Norse Petroleum Directorate, Oil and Condensate Main on the Norwegian Continental Shelf, (updated Stride 10, 2016).
14ConocoPhillips, Norway, The Pipelines, accessed Lordly 27, 2015.
15ExxonMobil, Norway, Refining and advantage, accessed September 2, 2016.
16Statoil, Period Report 2015, p. 38.
17Oil & Gas Journal, “Cosmopolitan Look at Reserves and Production,” (Dec 7, 2015) p. 22.
18Norwegian Petroleum Board, Fact Pages, Monthly Yield – by field, accessed Revered 18, 2016.
19Norwegian Petroleum Directorate, Latest Activity, Reserves in fields beneath development (pdo approved fields), accessed Sep 7, 2016.
20Statistics Norway, External Commerce in goods, accessed September 1, 2016.
21Statoil, Norge’s Gas Transport System, accessed Grand 13, 2015 and Gassco, Pipelines and Stage, accessed August 13, 2015.
22Statistics Norge, External trade in goods, accessed Sep 1, 2016.
23Norwegian Petroleum Directorate, Counsel – Production, Annual Yield, 1971-2015, accessed September 1, 2016.
24Statoil, Kårstø Processing Works, accessed September 18, 2015.
25Ibid
26Statistics Norge, Electricity, 2014, Table 3: Begetting, imports, exports and consumption of energy (December 22, 2015).
27Statnett, Brief Legend, Cable to the UK, and NORD.LINK, accessed May 27, 2015.
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