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Norway eyes gas pipeline to Barents Sea
by Staff Writers
Bodo, Norway (UPI) Sep 2, 2011

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Norway says it is studying extending its existing offshore natural gas pipeline system hundreds of miles northward to tap new discoveries in the Barents Sea.

Foreign Minister Jonas Gahr Store told attendees at a conference last week in Bodo, Norway, the state-owned energy company Gassco is now looking at how the Norwegian shelf gas pipeline system could be extended more than 600 miles to the north, the Norwegian online journal BarentsObserver.com reported.

"The development of the Barents Sea as a new European gas region opens large perspectives for economic and industrial development in the north," Store said.

He added that if Norway can take advantage of the opportunities, "we could stand on the threshold of a new industrial epoch of great significance for welfare, development and employment in the north."

The foreign minister, however, cautioned that even though early assessments of the Barents Sea have pointed to promising oil and gas reservoirs, more gas discoveries will need to found before a pipeline stretching from the Norwegian Sea would be profitable, the journal reported.

Hopes have been significantly raised that the Barents Sea could become a new petroleum province for Norway as its older fields begin to play out. The state-owned Statoil and the Italian company Eni in April announced a landmark oil and gas find at Skrugard.

Analysts have said the find could prove to be Norway's biggest discovery in a decade. It is believed to hold as much as 250 million barrels of recoverable reserves, which would make it bigger than the only other oil field in the Barents Sea at Goliat.

Since then, further gas strikes have been logged at Norvarg and Skalle.

A large-scale natural gas production buildup in the Barents Sea region would stand in stark contrast to its current status -- there is currently only one operational gas field there, at Snohvit. Its product is piped to an onshore installation where it is converted into liquefied natural gas and exported via tankers.

Store told the conference a potential new gas pipeline to the region could be a "decisive" factor for its development, the oil and gas trade publication Upstream reported.

Gassco is looking at the costs of a new pipeline, which initial estimates have put at between $1.8 billion and $5.5 billion, the publication said.

A major factor in making a new pipeline possible is an agreement over the maritime borders between Norway and Russia. Both countries this year ratified a treaty that delineates which country controls what in the formerly disputed southern Barents region.

Store told the Boro audience the agreement was a "milestone" that would enable more exploration in the area.

The amount of oil and gas in the Barents region is still unknown, but Norwegian officials say they're excited.

"We know what is west of this area and we have some knowledge of what is east of this area, so we have all possible reasons to be optimistic," Minister of Petroleum and Energy Ola Borten Moe told BarentsObserver.

He said a seismic survey in a 3,000-square-mile area will be wrapped up in September.

"After we get the results from the seismic surveys and mapping of the seabed geological structures, we will do an assessment study that will include environmental impact analysis, consequences for the fisheries, petroleum resource estimation and consequences for the society," Moe said.

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Commentary: Global con?
Washington (UPI) Sep 1, 2011
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