Norway approves gas pipeline from Talisman's Varg field
BY KJETIL MALKENES HOVLAND
OSLO -- The Norwegian government granted Talisman Energy planning permission to construct a new pipeline that will connect the North Sea Varg field to the United Kingdom.
The 6 km pipeline is expected to export up to 1.2 MMcm of gas a day from December 2013. It will take the gas to the Talisman operated Rev field, via the BG Group operated Armada field and on to the United Kingdom, the Ministry of Petroleum said.
"Varg gas export is an economically profitable project that will contribute to increased production and a longer life for the Varg field" said Minister of Petroleum and Energy Ola Borten Moe.
The pipeline investment is estimated at $122 million, the ministry said.
The Varg field is expected to contain between 1.4 Bcm and 1.7 Bcm of gas, or a little more than 1% of Norway's 2012 gas output. It has been in production since 1998 and is now in tail production. It has mainly operated as an oil field during that time due to lack of the necessary infrastructure needed for the recovery of gas.
Increasing the recovery rate on existing fields is important to maintain Norway's production, Mr. Moe added. In 2012, Norway produced 3.86 MMboe, 15% below its 2004 peak.
Talisman has a 65% ownership stake in the Varg field. Petoro has a 30% stake, and Det norske oljeselskap owns 5%.
Dow Jones Newswires