London — Norway's energy ministry has approved the plan for development of the third phase of the giant Troll field in the North Sea, as operator Equinor looks to maintain stable Norwegian gas production well into the 2030s.
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Equinor and its partners plan to start gas production from Troll phase three -- designed to produce from the gas cap above the oil column in Troll West -- in the first half of 2021.
Troll phase 3 has been touted as the main project offshore Norway to keep gas production levels -- currently at around 120 Bcm/year -- stable over the next two decades.
"The field has an important part in our plans to transform the Norwegian Continental Shelf for sustainable value creation for several decades," Gunnar Nakken, Equinor's senior vice president for Operations West, said in a statement Friday.
Equinor is increasingly prioritizing gas output from Troll -- easily Europe's biggest gas field -- with gas injection for oil recovery seen as declining in importance.
"Troll meets 7%-8% of Europe's total daily gas consumption -- we will deliver safe, profitable and carbon-efficient energy from Troll that helps reduce coal consumption and reduce CO2 emissions in Europe with a long-term perspective beyond 2050," Nakken said.
Equinor submitted the development plan for Troll phase 3 -- effectively taking a final investment decision on the project -- in July as it looks to offset an expected decline in gas output on the Norwegian Continental Shelf in the mid-2020s.
Troll -- which along with Oseberg is one of Equinor's swing fields which it can turn up or down depending on prevailing gas prices -- has been producing at close to its available capacity, depending on maintenance, in the recent past.
Capital expenditure for Troll phase 3 is estimated at NOK7.8 billion ($960 million) which will help extend the productive life of the Troll field beyond 2050.
Torger Rod, Equinor's senior vice president for project management, said Troll phase 3 would have a break-even of less than $10/b of oil equivalent.
The partners have already awarded contracts within marine installations and subsea facilities totalling an estimated NOK950 million to Nexans, Deep Ocean, IKM, Allseas and Marubeni.
In addition, contracts worth approximately NOK 2 billion have been awarded for subsea facilities and the construction of a new processing module on the Troll A platform to Aker Solutions.
NW EUROPEAN OUTPUT
The timing of the development plan for phase 3 and its projected start date come at a critical time for European gas given the stark warnings of falling UK and Dutch gas output at the start of the 2020s.
In the Netherlands -- which has been importing record-high gas volumes from Norway in the past year -- production from the giant Groningen field is to be phased out by 2030, with significant quota reductions in the early 2020s.
The Troll partners are Equinor (30.58%), Norwegian state holding company Petoro (56%), Shell (8.1%), France's Total (3.69%) and US major ConocoPhillips (1.62%).
--Stuart Elliott, Stuart.Elliott@spglobal.com
--Edited by Jonathan Fox, email@example.com