Norway’s Statoil ASA (STO), along with its partners BP Plc (BP) and Algeria’s state energy company Sonatrach, have entered into a $ 1.15 billion field development agreement with Petrofac International in Algeria's In Salah Southern Fields gas project.
Per the agreement, Petrofac is entitled to provide engineering, procurement and construction (“EPC”) services for the In Salah Southern Fields development project. Additionally, Petrofac is expected to construct facilities, which involve well pads, manifolds, flowlines as well as a new central processing facility with a daily processing capacity of 17 million cubic meters of gas.
The deal is a part of the two-phase development program at the In Salah license following diminishing gas production from three gas fields (Krechba, Teg and Reg). The first phase comprised the development of those gas fields, which target 9 billion cubic meters of gas output annually.
Initiated in late 2001, phase one commenced its commercial gas production in July 2004. Phase two comprises expansion of four gas fields, Garet El Bifna, Gour Mahmoud, In Salah and Hassi Moumene, in the southern part of the license. Statoil holds a 31.85% investment share in the In Salah Southern Gas Fields license, with BP holding 33.15% and Sonatrach holding the balance 35%.
One of the largest dry gas joint venture projects, In Salah Gas, aims at expanding seven conventional gas fields in southern Sahara. It is the world’s first full-scale carbon dioxide capture project at a gas field. Statoil expects its gas production from Southern Fields to come online in the first half of 2014.
Statoil remains active with its various upstream activities and is still exploring various domestic and international resources for its growth. We also believe that the growing share of natural gas in the company’s Norwegian Continental Shelf volume mix and its extensive interests in infrastructure assets enable it to play a leading role in the European natural gas market.
Recently, the company also initiated its gas production from its 2009 Beta West discovery, situated 1.5 kilometer west of the Sleipner West reservoir in the North Sea. The company holds a Zacks #1 Rank, which is equivalent to a short-term Strong Buy rating.
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