Norway's Skanled gas project suspended

29 April 2009 15:51  [Source: ICIS news]

Proposed Skanled pipelineLONDON (ICIS news)--The Skanled gas project in Norway, which was due to supply chemicals companies with ethane, was suspended until further notice on Wednesday as partners decided it would no longer be viable in the current financial climate.

The Skanled partners said they had decided to suspend further project activities due to increased commercial risk combined with the global economic developments that had given an uncertain view on future gas demand.

“Despite strong efforts by many stakeholders to succeed with the project, it is Gassco’s view that the current economic environment and also subsequent uncertainties related to timing of new field developments on the Norwegian continental shelf, have weakened the basis for the project,” said Thor Otto Lohne, executive vice president of pipeline operator Gassco.

“The project might be re-launched if the commercial conditions become more favourable in the future,” he added.

The project, which would have linked Karsto in western Norway to the region of Grenland in the south of the country, came under threat when the partners dropped plans to build a gas separation plant at the Grenland terminal.

However, the partners said in January that they had decided to push ahead with project after UK-based chemicals firm INEOS confirmed it would still need long-term ethane supplies for its cracker expansion plans.

INEOS then said it was still planning to expand its Rafnes, Grenland, cracker by 100,000 tonne/year in the long term, and welcomed plans to secure deliveries of natural gas into the region.

INEOS was not immediately available for comment on the impact of the suspension.

Other companies that were expected to utilise gas from Skanled included Perstorp, Kemira, Eka, Trelleborg and Yara.

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By: Hilde Ovrebekk
+44 20 8652 3214

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