Equinor has received government approval for its plan to boost output and extend the lifetime of Troll, Norway's largest oil and gas field, the company said on Friday.
The field accounts for about 40 percent of the natural gas reserves on the Norwegian continental shelf (NCS) and meets about 7-8 percent of Europe's consumption. Norway is Europe's second largest gas supplier after Russia.
The approved 7.8 billion Norwegian crowns ($915 million) Phase 3 development will help to produce an extra 2.2 billion barrels of oil equivalent and extend gas production beyond 2050, the company said.
In Phase 3, a gas cap located above the Troll West oil column will be produced at the same time as oil production continues.
"With a break-even of less than $10 per barrel, Troll Phase 3 is one of the most profitable and resilient projects ever in our company," said Torger Roed, Equinor's senior vice president for the project.
Equinor and its partners have awarded 950 million crowns in contracts for marine installations and subsea facilities to Nexans, Deep Ocean, IKM, Allseas and Marubeni.
In addition, the partnership has awarded contracts worth about 2 billion crowns for subsea facilities and the construction of a new processing module on the Troll A platform to Aker Solutions.
In October, Equinor said it had upgraded its oil-producing Troll B platform to process natural gas for export until the Phase 3 comes on stream in 2021.
"In a few years Troll will only produce from the large remaining gas reserves. The production horizon for gas from Troll lasts beyond 2050," it said.
Equinor, the field's operator, has a 30.58 percent stake, state-owned Petoro has 56 percent, Shell 8.1 percent, Total 3.69 percent and ConocoPhillips 1.62 percent.
($1 = 8.5238 Norwegian crowns)
(Editing by Terje Solsvik and Jason Neely)