Page 9 - Euroil Week 45 2019

EurOil INVESTMENT EurOil
PGNiG consolidates position off Norway
NORWAY
Duva wil feed gas into the Baltic Pipe project between Norway and Poland.
POLAND’S national gas company PGNiG has upped its stake in a North Sea field that should provide gas for its Baltic Pipe project.
The company said on November 7 it had acquired a 10% in a pair of licences containing the Duva gas field off Norway from Norwegian player Pandion Energy. The deal, once closed, will raise PGNiG’s ownership of the project to 30%.
PGNiG entered Norway more than a decade ago, and has since built up a portfolio of shares in 27 licences on the country’s shelf. It closed a deal to become a shareholder in Duva in late Octo- ber, buying a 20% share of Norway’s Wellesley Petroleum.
“Increasing our share in the deposit, which is close to starting production, brings us nearer to achieving the goal of implementing our strat- egy for natural gas extraction on the Norwegian Continental Shelf [NCS],” CEO Piotr Wozniak said of the new deal.
Duva was discovered 140km north of the city of Bergen in 2016, and contains 88mn barrels of oil equivalent (boe) in recoverable reserves, including 8.4bn cubic metres of gas. It is pro- jected to start production in late 2020 or early 2021 and flow at a peak rate of 30,000 barrels of oil equivalent per day (boepd), via a tieback to the nearby Gjoa platform.
The field is operated by the UK’s Neptune
Energy with a 30% position, with a further 30% share held by Japan’s Idemitsu Petroleum. Pan- dion is planning to withdraw from the project, having also announced on November 7 it would divest a 10% share to Solveig Gas Norway.
“Duva was the first discovery in our portfolio after forming Pandion Energy almost three years ago,” Pandion CEO Jan Christian Ellefsen com- mented in a company release. “We are pleased with the significant value created to date, hav- ing participated since the field was discovered through to development.”
With the added equity in Duva, PGNiG expects to net 0.2 bcm of gas production annu- ally between 2023 and 2028, which will help fill Baltic Pipe, a planned 10 bcm per year pipeline linking Norway’s offshore gas with the Polish market via Denmark. The €2.1bn project cleared its final key regulatory hurdle in October, when the Danish government approved construction of its offshore section through Denmark.
Pipelaying work is due to start in 2020, with first gas anticipated in 2023. Baltic Pipe will begin deliveries at around the same time as Poland’s long-term gas contract with Russia’s Gazprom expires. Warsaw has repeatedly said it will not renew this contract, covering its demand with gas from Baltic Pipe and its Swinoujscie LNG terminal instead. It may continue taking some Russian volumes, but only on a spot basis.™
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