Norwegian gas transporter Gassco operates the world’s largest integrated, offshore gas transport network, supplying energy to 25 million European households. Reliability is vital in a market under continuous change.
Our transportation system has proved 100 per cent reliable during the past 17 years, says CEO of Gassco Brian Bjordal. But we have to be on the alert. We are operating in a world where energy demand can change from minute to minute in a fluctuating production market. This demands continuous, optimal utilisation of the whole system.
Gas imports to the European market are expected to increase from one third of the total energy consumption at the end of 1990 to two thirds by 2020, according to the International Energy Bureau. Says Bjordal, The more gas we deliver the more stress on the existing system, which might hit our flexibility. We have to look into new means of ensuring reliable supply; so we are therefore in the process of developing a new pipeline for Norwegian gas to the U.K. The pipeline solutions include both the use of the existing U.K. pipeline system and a dedicated pipeline to southern England.
The Ormen Lange gas field is located 130 km off the coast of Norway. The plan is to have a pipeline running from the field to an onshore terminal, or to an offshore processing platform. First delivery of gas is scheduled to start in 2007, and the field is expected to produce about 30% of the total exports of gas from the Norwegian Continental Shelf.
The importance of good infrastructure
Bjordal believes the gas reserves on the Norwegian Continental Shelf are sufficient to feed the European market for the next 100 years. However, he prefers looking at a 20 years perspective. We have to be realistic. I see a change in the market, with new players operating on a more dynamic and short-term basis than before. Optimisation of the existing gas transportation system is needed, and several new concepts are being developed. One is the Liquefied Natural Gas (LNG) concept considered a good environmental choice and with potential to exploit offshore gas reserves without the need to invest in capital-intensive infrastructure.
I believe that as long as there is a well-functioning infrastructure, such as on the Norwegian Shelf, there will be no need for alternative solutions in the near future. It is completely different in other areas of the world, where such infrastructure does not exist. Then alternative solutions such as the LNG concept will come into their own.
Deregulated market
Gassco took over responsibility of operating the gas transport network on the Norwegian Continental Shelf in January 2002. It is an independent, limited company 100% owned by the Norwegian authorities. It was established as a consequence of new structural changes in the industry and the new EU Gas Market Directive aimed at liberalising the gas market in Europe.
It is natural to have an integrated, monopoly transportation system on the Norwegian Continental Shelf, says Bjordal. Gassco has two main goals: operating and regulating the capacity of the system. We operate on behalf of the owners and the Norwegian authorities. It is a balancing act between managing the development of transport solutions, and making sure they are operated safely and efficiently.
Operators will come and go, fields will emerge, live and die. As long as we operate our system in a cost- and resource-efficient way, and we satisfy our customers, we will remain on the map. Our focus must be on competence and matching market needs.