PGNiG: surge in gas production in Norway
Tuesday 22 September 2020
PGNiG Upstream Norway has entered into an agreement with A / S Norske Shell, as a result of which it will acquire shares in the Kvitebjørn and Valemon production fields in the North Sea. Thanks to the transaction, the PGNiG Group's own gas production in Norway will increase to 0.9 billion cubic meters in 2021, i.e. it will be by approx. 30%. greater than assumed in previous forecasts.
The gas extracted from these fields, together with the volumes resulting from previous acquisitions carried out by the Norwegian company PGNiG in the period 2017–2020, will be sent to Poland after the Baltic Pipe gas pipeline is launched.
- This is our next transaction on the Norwegian Shelf, which is a consistent implementation of the strategy of the PGNiG Group. It serves the diversification of gas supplies and improves Poland's energy security based on our own resources. As in the case of earlier this year's transaction, where we increased our involvement in the Gina Krog field, this acquisition will translate into an immediate and significant increase in gas production by our company on the Norwegian Continental Shelf, which will have a positive impact on the operating results of the PGNiG Group - said Jerzy Kwieciński, president of the management board of PGNiG SA, the sole owner of PGNiG Upstream Norway.
As a result of the transaction, PGNiG Upstream Norway (PUN) will become the owner of 6.45% as a licensing partner. shares in the Kvitebjørn field and 3.225 percent. in the Valemon field. Additionally, the company will acquire shares in the infrastructure used to transport hydrocarbons produced from these fields. PUN estimates that thanks to the transaction, the average daily production of hydrocarbons - including oil and gas - by the company will jump by about 30 percent.
Natural gas resources dominate in both newly purchased fields. The planned gas production from these fields in 2020, corresponding to the shares purchased from Shell, accounts for approx. 70 percent of PUN's current production in Norway. Therefore, the transaction will allow the company to immediately increase its own gas production - in 2021 it will be almost 30%. higher than assumed in previous forecasts and approx. 80 percent. higher than the gas production by PUN in 2019. According to the company's estimates, in the years 2023-28, i.e. after the Baltic Pipe gas pipeline is launched, both fields will provide the company with an average of about 0.2 billion cubic meters. gas per year.
Kvitebjørn is a field located in the northern part of the North Sea. The water depth is 190 meters. Kvitebjørn was discovered in 1994, and the deposit development and exploitation plan was approved in 2000. The field has been exploited since 2004 using a fixed platform with an integrated drilling rig. Gas is transported via an offshore pipeline to the Kollsnes terminal, while the condensate is transported via a pipeline connected to the Troll Oil Pipeline II to the Mongstad terminal.
Valemon is a field located in the immediate vicinity west of the Kvitebjørn field. The depth of the water is 135 meters. Valemon was discovered in 1985. The development and operation plan was approved in 2011 and production started in 2015. The field is developed by means of a fixed production platform with a simplified hydrocarbon separation process. The platform is remotely controlled from the onshore operations center. Condensate and gas are transported via a pipeline to the Kvitebjørn field and then via an offshore pipeline to the processing terminal in Mongstad.
The deal with Shell has yet to be approved by the Norwegian Oil and Fiscal Administration. Following the closing of the transaction, PGNiG Upstream Norway will expand its portfolio of licenses in which it holds shares with 4 more licenses and will hold interests in a total of 32 licenses on the Norwegian Continental Shelf. The intensification of field acquisitions over the last four years has allowed the Company to increase its natural gas and crude oil reserves from 80 million to over 200 million boe today.
PGNiG Upstream Norway already produces crude oil and natural gas from 7 fields: Skarv, Morvin, Vale, Vilje, Gina Krog, Skogul and Aerfugl. Investment and analytical work is carried out on five more fields: Duva, Tommeliten Alpha, King Lear, Aerfugl Outer and Shrek.