Norwegian PM defends Snoehvit arctic LNG facility

STAVANGER, Norway, Aug 26 (Reuters) - Norway's prime minister on Tuesday defended StatoilHydro's (STL.OL) $10 billion Snoehvit liquefied natural gas facility in the Arctic despite numerous start-up problems and higher carbon emission levels.

"I regret that there have been huge technical problems," Jens Stoltenberg told a news conference at an ONS energy conference in Stavanger on Norway's North Sea coast.

"StatoilHydro is taking this very seriously and is committing big resources to solve the problem," he said about production problems which have lowered output and produced unexpected soot and pollution in the Arctic region.

Stoltenberg said majority state-owned StatoilHydro had underestimated the challenges of developing energy resources in the harsh Arctic climate on the very northern tip of Europe, but added he believed the project would eventually be highly profitable.

"Snoehvit will have large positive ripple effects for Norway and the world," Stoltenberg said.

Gas produced at the offshore Snoehvit field in the Barents Sea is cooled to a liquid form in an onshore plant and transported on ships to the United States and Europe.

But production is running at only 60 percent capacity and outages have been frequent due to a string of technical problems since Snoehvit opened about a year ago.

Norway sees Snoehvit as a gateway to Arctic oil and gas development and a smaller model for Russia's Shtokman gas field, which could be built in the next decade.

StatoilHydro and France's Total (TOTF.PA) have been chosen by Russia's Gazprom (GAZP.MM) to help develop Shtokman, a field seen holding enough gas to supply the world for a year.

(Reporting by Wojciech Moskwa and Terje Solsvik; editing by Christopher Johnson)