Norway’s 800 km Barents Sea gas pipeline back on agenda
Published by Sara Simper,
Editorial Assistant
World Pipelines,
A proposed US$5 billion export route linking gas fields in the Barents Sea in Northern Norway to European markets could help alleviate the continent’s dependence on LNG imports, according to a new report by Wood Mackenzie.
The report ‘Can the Norwegian Barents Sea help solve Europe’s gas crisis?’ concludes that after spending years in the doldrums, Russia’s invasion of Ukraine brought a potential Barents Sea gas export route back onto the agenda in Norway. However, the report added there are several hurdles the 800 km, 15 million m2/d would have to overcome before it was green lit by Oslo.
“The Barents Sea basin has enough existing resources to fill the pipeline, but the costs involved would make developing the gas more expensive than alternative imports from new LNG developments,” Daniel Rogers, Senior Analyst at Wood Mackenzie says. “However, gas from the area offers a cleaner alternative to LNG, and any proposed development would be carried out under strict Norwegian environmental controls.”
The report adds that state-funding of the pipeline, or the introduction of a Carbon Border Adjustment Mechanism (a tool designed by the EU to encourage cleaner industrial production in non-EU countries) on gas imports to Europe would increase cost competitiveness.
“The carbon and socioeconomic argument for a pipeline – and further development of the basin – is strong, but it won’t happen without government support,” Rogers says. “However, if long-term European gas demand and prices fall faster than expected, this would put further pressure on the viability of the project.”
The report also states that while Barents Sea gas would help alleviate Norwegian production decline, it won’t be a gamechanger. A bigger pipe would be required to incentivise high-impact exploration and realise the basin’s full potential. Currently, gas in the Barents Sea is produced from the Snøhvit Area subsea fields and is sent via pipeline to the Hammerfest LNG facility. The facility is expected to be at full capacity until the 2040s. There is currently no direct pipeline route connecting Barents Sea gas resources to the main Norwegian pipeline network.
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Read the article online at: https://www.worldpipelines.com/special-reports/11072023/norways-800-km-barents-sea-gas-pipeline-back-on-agenda/
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