UPDATE 1-Statoil in U.S. shale gas transport deal

Tue Mar 2, 2010 3:32am EST

Related Topics

* Deal to transport up to 2 bln cbm/yr from Marcellus Shale

* To deliver gas to New York City, New Jersey from 2013

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OSLO, March 2 (Reuters) - Norwegian oil and gas group Statoil (STL.OL) said on Tuesday it had entered into agreements to deliver natural gas produced in the Northern Marcellus shale gas area of Pennsylvania to New Jersey and New York City areas.

The deals with Tennessee Gas Pipeline, a subsidiary of El Paso Corp EP.N, and Texas Eastern Transmission, a subsidiary of Spectra Energy Corp (SE.N), ensures Statoil the right to transport up to 2 billion cubic metres (bcm) per year, it said.

"This is an important breakthrough for Statoil's gas marketing position in the U.S.," Statoil's executive vice president for natural gas, Rune Bjornson, said in a statement.

The transportation capacity contracts are expected to commence in November 2013.

"We expect that this will create attractive sales opportunities in New York City, New Jersey and surrounding areas in what is regarded the most attractive gas market in the U.S.," Bjornson added.

Statoil's Marcellus partner Chesapeake Energy Corporation (CHK.N) has reserved 4.2 bcm and Statoil 2 bcm in the case of the Tennessee project, while Chesapeake has reserved 4.3 bcm, Statoil 2 bcm and local distribution company Consolidated Edison 1.7 bcm in the case of the Texas Eastern project, Statoil said.

Statoil acquired a 32.5 percent interest in Chesapeake's Marcellus shale gas acreage in November 2008.

Statoil's equity production from the Marcellus shale gas play is expected to increase to at least 50,000 barrels of oil equivalent per day in 2012 (around 3 bcm) and at least 200,000 boepd (around 10 bcm) after 2020.

(Reporting by Oslo newsroom)

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