Statoil steps up the gas pressure

July 7, 2011

Statoil last month launched a campaign urging the UK to make natural gas a key component in its long-term future energy. The operator argues gas can be an important part of securing UK energy supplies and cutting CO2 emissions, although political will is needed to realise the full potential and attract the right investment.

The Norwegian operator's campaign comes ahead of expected reforms of the UK energy market which will set the regulatory framework for different types of energy used to generate electricity. The reforms are linked to the UK's targets to reduce its greenhouse gas emissions by at least 80% by 2050, relative to 1990 levels.

‘We are raising our voice in the UK to underline that natural gas is not just another fossil fuel,' declared Rune Bjørnson, Statoil senior vice president for natural gas. ‘It is a long-term energy source – fit to deliver cost-efficient CO2 reductions and secure energy supplies. We are keen to see a regulatory framework that realises the full potential of natural gas and there is a window to act now.

‘Natural gas can be instrumental in delivering on the UK's 2050 climate ambitions in a secure and affordable manner,' Bjørnson added. ‘In our view natural gas is the energy source that best caters for the challenges that the UK is facing, but in spite of that we are now facing great uncertainty when it comes to the role of natural gas in the UK energy mix. We are, therefore, calling for greater clarity.

‘When we speak to UK politicians, parliamentarians and civil servants in bilateral settings, we are strongly encouraged to continue to spend money, continue to invest and provide or even increase the supply of natural gas to the UK market. However, when we read the public documents, when we listen to what is said publicly, we can't see this any more.' Bjørnson claimed potential UK customers and investors, including plans for 18 out of 21 gas fired plants, were currently sitting on the fence as they too waited for greater clarity. ‘We would very much like to see the British government confirm to us publicly what they say to us in bilateral meetings.' Statoil is the largest supplier of gas from the Norwegian continental shelf to the UK, with a market share of around 16-18%. It has been present in the British market since 1977. Natural gas from the NCS is delivered through infrastructure consisting of the pipelines Vesterled, Langeled and FLAGS via Tampen link. Statoil is currently running a gas marketing campaign in Europe, profiling gas as a fuel for the future and encouraging debate about the energy challenges that Europe faces. Statoil and SSE (Scottish & Southern Energy) also announced last month that the companies had signed a heads of agreement for an annual volume of 0.5bcm of natural gas, to SSE's Peterhead gas power plant in Aberdeenshire over a 10-year period, with deliveries starting 4Q 2012. Bjørnson said this agreement confirmed the competitiveness of Statoil's Norwegian gas portfolio, and was an illustration of the company's commitment to the UK gas market.

Statoil and SSE are already jointly involved in the Aldborough gas storage facility in East Yorkshire. Statoil also has long-term contracts in the UK with BP, Centrica, Scottish Power and GDF Suez. OE

Categories: Energy Europe Regulations


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