Norway's Equinor starts third phase of Troll field in gas boost

Norway's state-controlled Equinor has started production from the third gas-focused phase of its giant Troll field in the North Sea, extending both the life of the field and its plateau production.

Troll Phase 3 is considered key to Norway's plans to offset declining gas production elsewhere on the Norwegian Continental Shelf and comes as European gas prices remain at record highs.

"Troll phase 3 will extend the life of Troll A and the Kollsnes processing plant beyond 2050, and the plateau period by 5-7 years," Kjetil Hove, Equinor's executive vice president for exploration and production Norway, said in a statement Aug. 30.

Equinor said Troll Phase 3, which started production late on Aug. 27, had a break-even price below $10/boe and CO2 emissions of less than 0.1 kg/boe.

Recoverable volumes from Troll Phase 3, which will produce the Troll West gas cap located above the oil column, are estimated at as much as 347 Bcm of gas. Investment in the project was some NOK8 billion ($923 million).

Troll Phase 3 consists of eight wells in two templates, a new pipeline and umbilical connecting the templates to Troll A as well as a new gas processing module on the platform, Equinor said.

The new wells are tied in to the Troll A platform and Troll phase 3 will extend the platform's life past 2050.

Equinor operates Troll Phase 3 with a 30.58% stake. Its partners are Norway's Petoro (56%), Shell (8.1%), TotalEnergies (3.69%), and ConocoPhillips (1.62%).

High prices

The timing of the startup of Troll Phase 3 will see Equinor and its partner benefit from sky-high European gas prices.

S&P Global Platts assessed the TTF day-ahead price on Aug. 27 at Eur47.58/MWh, which is up from just Eur8.75/MWh a year ago.

"Equinor has been fortunate with the timing of Troll Phase 3 given current record high European gas prices, as well as a record gas price premium over oil," S&P Global Platts Analytics' James Huckstepp said.

However, Huckstepp said, total Troll production will remain constrained at the Kollsnes processing facility.

"This presents more upside to production over the summer periods when Troll has traditionally flexed down, rather than in winter," he said.

Troll permit

The startup of Troll Phase 3 also comes as Equinor secured a higher permit for gas production from the whole of Troll of 37 Bcm for the new Gas Year that starts on Oct. 1.

The permit is an increase of 1 Bcm on the permit in place for the current Gas Year that runs to Sept. 30.

The Troll permit had been 36 Bcm for a number of years apart from Gas Year 18 (Oct. 1, 2018-Sept. 30, 2019) when it was increased from an originally approved 36 Bcm to 38 Bcm following a request from Equinor.

Equinor uses Troll and the Oseberg field as flexible assets, producing at capacity during periods of high prices and deferring near-term production when prices are low.

Equinor is allowed to either over- or under-produce from Troll and Oseberg and can compensate with either higher or lower production in later years depending on the volumes stored in the so-called production "banks".

Equinor last summer deferred significant volumes of production from Troll and Oseberg due to very low prices.

Its newly appointed CFO Ulrica Fearn said July 28 the company was now operating its flexible Norwegian gas fields at "full capacity" to make the most of high European gas prices.

According to Platts Analytics, the new permit level could see a new record for Troll production in Gas Year 21, despite the it being lower than the 38 Bcm of Gas Year 18.

Troll is a significant supplier of gas to the European market and can meet 7-8% of Europe's total daily gas consumption. It is Europe's biggest producing field, and after more than 20 years of production still has 65% of the gas to be recovered.

A comprehensive development plan has been drawn up for the gas in the Troll field, which makes it likely that new wells will be drilled, and new infrastructure will be installed on the field, Equinor said.