Norwegian giant Statoil ASA
(STO - Free Report
) and its partners have agreed to invest around NOK 2.1 billion ($344.6 million) relating to the construction of Edvard Grieg Pipeline – a new oil export pipeline in the Utsira High area, off Norway.
The planned 43 kilometer, 28-inch pipeline will facilitate the development of the Edvard Grieg and Ivar Aasen fields, as well as other future projects in the area. The new artery will link the Edvard Grieg field – operated by Lundin Petroleum – to the existing Grane oil pipeline for onward export to the Sture terminal.
The plan for the installation and operation of the Statoil-operated pipeline has been submitted to Norway’s Petroleum & Energy Ministry. The approval is expected by this autumn. The construction of Edvard Grieg Pipeline was recommended by pipe infrastructure agency Gassco.
The pipe is scheduled to be installed in the summer of 2014 with tie-in work targeted in 2015, in line with the planned production start in the third quarter of 2015 from Grieg. Grieg is being jointly developed with Det Norske Oljeselskap’s nearby Ivar Aasen field due to be commissioned in 2016.
The partners have awarded JP Kenny the contract for detail engineering on the pipeline while Allseas will be in charge for installation. The pipe will have a design life of 30 years.
Located between the producing Sleipner and Grane fields in an area with well-established infrastructure – Utsira High – also hosts the massive Johan Sverdrup discovery that is being developed.
Statoil, the operator in the pipeline joint venture, has a stake of 20%. The other partners Lundin Norway, Wintershall Norge AS, Det norske oljeselskap ASA, OMV Norge AS and Bayerngas Norge AS have a share of 30%, 18%, 14%, 12% and 6%, respectively.
Statoil carries a Zacks Rank #4 (Sell). However, there are other Zacks Ranked #1 (Strong Buy) stocks – PetroQuest Energy Inc.
, Ocean Rig UDW Inc.
(ORIG - Free Report
) and Hornbech Offshore Services, Inc.
(HOS - Free Report
) – that are expected to perform impressively over the short term.