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“Snøhvit” budget overrun at 2,5 billion Euros so far

(Foto: StatoilHydro)

The budget for the development of the Snøhvit gas field in the Barents Sea was originally 5 billion Euros. Today the total costs are calculated to 7,5 billion Euros. The increasing costs are mainly due to technical problems with production, and these remain far from solved.

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StatoilHydros Chief executive Helge Lund is reluctant to reveal much information about what they know and what they don’t know about the problems, according to Norwegian newspaper Aftenposten.

Lund says that they have more knowledge about the problem today than what they had when the LNG-plant at Melkøya was started again a month ago, but they do not have enough knowledge to say exactly what would solve the problems.The reason for all the trouble is problems in the cooling system, where the gas is cooled down so it becomes liquid and ready for transport.

The LNG-plant will be shut down this summer for maintenance, but the shutdown will not be long enough to solve all the problems, says Lund. But he can’t say for sure when the plant will have full production.

Despite all the negative media publicity in connection with the production problems, the StatoilHydro stocks had a three percent rice after Lund presented the energy company’s latest quarterly status report.