Snoehvit LNG ready to banish shutdowns this year-Statoil

Thu Apr 25, 2013 8:00am EDT

* Snoehvit expected to be more reliable after latest repairs

* Plant beset by unexpected shutdowns since start in 2007

By Nerijus Adomaitis

HAMMERFEST, Norway, April 25 (Reuters) - Major work at Norway's Snoehvit liquefied natural gas (LNG) plant will mean a stoppage-free year when it reopens this month, ending a reputation for unreliability, a Statoil senior executive said.

The plant has been beset by technical faults that led to several production stoppages in 2012, the most recent of which was a gas leak in February that caused an evacuation.

Europe's only LNG-producing plant, on Melkoeya island at Europe's northernmost tip, will restart production within a week, a maintenance officer at the plant told Reuters on Monday, after being shut since February.

"We plan no new turnaround shutdowns for this year," Oeivind Nilsen, production vice-president for Hammerfest LNG said in an interview.

The plant, which can produce 4.3 million tonnes per year (mtpa) of super-cooled gas per year for transport by ship to markets in Europe, the United States and Asia, has suffered from long outages in the past.

"The regularity of the Snoehvit plant for the last three years has been in the order of 73 percent, and that, of course, is not acceptable," Nilsen said.

"Compared to other LNG plants in the world we need to make a significant step-up in regularity."

Nilsen said Statoil had made the plant more robust, and the latest modifications were expected to increase the number of days per year it operates.

"I think, it will lift regularity by 10 percent if we only solve the problem with the pre-treatment facility," Nilsen said.

The February gas leak was detected inside the "cold box", where cryogenic heat-exchangers are arranged together with the piping, with empty spaces filled with insulation material.

"When we experienced the gas leakage in the "cold box" we knew that it would result in a long shutdown due to difficult access and extensive pre-work," said Nilsen.

"But this also gave us a golden opportunity to move forward remedies we actually planned for the next year."

READY MADE DELIVERY

Several critics blame Snoehvit's design for its long shutdowns as the plant was delivered on a barge as a finished product, instead of having been built on-site.

In order to transport it on the ship, the size was reduced, leaving not much space between the components, and making fixing faults more difficult than at the other plants.

"When Snoehvit was developed we were crossing frontiers, both geographically, being the first in the Barents Sea, and also technology-wise," Nilsen said.

The plant also uses an unique gas liquefaction technology, the Mixed Fluid Cascade (MFC), developed together by Statoil and Germany-based engineering company Linde AG. Most LNG plants use liquefaction technology developed by Air Products and Chemicals, Inc.

New elements included gas production with subsea templates controlled from onshore some 150 km away, sea water cooling, and re-injecting carbon dioxide stripped from the feed gas back to a subsea reservoir.

Statoil has a 36.79 percent stake in the Snohevit licence, with state-owned Petoro 30 percent, Total 18.4 percent, GDF Suez 12 percent and RWE Dea 2.81 percent.

Last year Statoil and partners decided against a second processing unit, or train, at Snoehvit, partly because there was not enough gas reserves to justify it.

"I think that new gas discoveries in the Barents Sea will trigger coming back to discussions about the second train," Nilsen said, adding that it was unlikely to happen this year as the focus of exploration in the Barents Sea was oil.

Gas production from the field, which started in 2007, totalled 4.7 bcm in 2012, up from 4.3 bcm in 2011, but lower than the peak of 4.9 bcm in 2010.

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