OSLO (Dow Jones)--StatoilHydro ASA (STO) said Friday in its forecast for 2008 that production at its Snoehvit onshore plant at Hammerfest won't produce any more liquefied natural gas until the first half of January due to a sea-water leakage in a heat exchanger.
Snoehvit was expected to start regular commercial deliveries from Dec. 1, already well behind earlier estimates. It has so far produced only one LNG cargo at the end of October and StatoilHydro said "the challenges associated with the start-up of the gas liquefaction plant will however entail a slow escalation of production than originally assumed."
The company said it is now working on the assumption that equity production from the Snoehvit field in 2008 will average 25,000-30,000 barrels of oil equivalent a day. It added: "but great uncertainty remains in relation to this estimate."
The StatoilHydro-led LNG export partners in the project, excluding Snoehvit stakeholders Total SA (TOT) and Gaz de France (1020848.FR) which will lift their own cargoes, have a 1.6-billion-cubic-meter a year LNG supply contract with Spain's Iberdrola SA (IBE.MC), which started in late 2006 when Snoehvit was originally planned to start up. The suppliers have had to secure spot cargoes from Egypt to meet that commitment until Snoehvit starts regular output.
The StatoilHydro-led partners - accounting for just under 70% of exports from Hammerfest - also have a long-term 2.4 billion cubic meter a year supply contract at the U.S. Cove Point receiving terminal.
StatoilHydro owns a 33.53% stake in the field, Petoro 30%, Total 18.4%, Gaz de France 12%, Hess Norge (HES) 3.25% and RWE DEA 2.81%.