UPDATE 1-Statoil to reduce capacity at giant Troll field

Thu Jan 27, 2011 7:44am EST

* Work to start later Thurs; curb "shorter than a week"

* Unclear how much output will be curtailed, nature of work

* UK gas prices jump to three-week high

(Adds details)

By Gwladys Fouche

OSLO, Jan 27 (Reuters) - Norway's Statoil (STL.OL) said it was planning on Thursday to curb production capacity to conduct repairs at its giant Troll field, the biggest gas reservoir off Norway, and that the work would last less than a week.

The news on Troll, which produces 31 billion cubic metres of gas per year and 113,000 barrels of oil per day, comes amid a 70 percent drop in the flows of Norwegian gas via the Langeled pipeline that helped push UK gas prices to a three-week high.

"We will reduce capacity this afternoon due to planned short-term repair work," Statoil spokesman Ola Anders Skauby told Reuters. "It will be shorter than a week."

The spokesman declined to say how much production would be cut during the repairs.

The day-ahead gas price in Britain rose to 58.25 pence per therm at 1000 GMT, up 0.60 pence from the previous session and the highest price since early January. [ID:nLDE70Q0UZ]

Imports from Norway via the Langeled pipeline dropped to just below 20 million cubic metres (mcm) on Thursday morning, from over 60 mcm still seen on Wednesday evening, according to National Grid data.

Skauby said the work at Troll, scheduled for Thursday afternoon, should not have started affecting Norwegian gas exports earlier in the day.

He did not say what the problem was at Troll or what kind of repair work would be conducted.

"It was planned for some time and it was scheduled to be done now," said Skauby. "We are delivering in accordance with our obligation towards our customers."

Operator Statoil (STL.OL) holds a 30.58 percent stake in Troll while Norwegian state-owned firm Petoro has 56 percent, Shell (RDSa.L) 8.10 percent, Total (TOTF.PA) 3.69 percent and ConocoPhillips (COP.N) 1.62 percent.

In November, the head of a Norwegian trade union representing some 2,300 Statoil employees warned that he expected more shutdowns at Statoil's ageing installations this winter due to a backlog of maintenance. [ID:nLDE6A21BC]

Terje Nustad said the backlog had built up since Statoil merged with the oil arm of aluminium producer Norsk Hydro (NHY.OL) in 2007 [ID:nLDE6AH1GC]

Statoil said that, aside from Troll and Oseberg, there were no issues affecting the platforms it operates off Norway.

Three platforms at the Oseberg field have been shut since Monday following a gas leak and Skauby said a start-up was still "a few days away". [ID:nLDE70P276]

(Additional reporting by Karolin Schaps in London; editing by Keiron Henderson)

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