Future Gas Export from the Norwegian Continental Shelf (NCS)

Thor Otto Lohne CFO and Executive Vice President

2013 • 76 fields are in production – more than 40% of the discovered resources are produced

• 55 companies are license holders on the Norwegian Continental Shelf (NCS)

• 42 wells drilled in 2012

• The investment level in 2012 was more than 20 B€ (incl. exploration cost)

• Oil production (incl. NGL and condensate) in 2012 was about 1.9 million bbl/d

• Gas sale in 2012 was 114.8 GSm³

The petroleum sector – Norway’s largest industry

2

www.gassco.no

• Connected to all major gas-producing

fields on the NCS

• 7 975 km of large-diameter, high-

pressure pipelines

• Riser platforms

• Large processing facilities in

Norway

• Receiving terminals in four

European countries

• Connected to major downstream

gas transmission systems in Europe

and the UK

The integrated Norwegian gas transport system

www.gassco.no

Gassco

• Gassco is responsible for safe and efficient gas transport from the Norwegian Continental Shelf

• Key activities include:

‒ Asset management; technical operation and maintenance of the pipelines, platforms and onshore facilities

‒ System operations; planning and monitoring of the gas supply

‒ Capacity management; administration of the available transport capacity

‒ Infrastructure development; adjustments and expansions of the gas infrastructure

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Situation on the Norwegian Continental Shelf (NCS)

0

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 40

 60

 80

 100

 120

 140

 160

20102000199019801975

Produksjon av naturgass og teoretisk eksportkapasitet, 1975-2010GSm3/år

Exit-kapasitet

TROLL

ORMEN LANGE

SLEIPNER ØST

ÅSGARD

FRIGG

EKOFISK

KVITEBJØRN

Other

ODIN

OSEBERG

SNØHVIT

HEIMDAL

VEST EKOFISK

GULLFAKS SØR

TUNE

KRISTIN

Frigg transport (Vesterled)

Nor-pipe

Zeepipe

Europipe

Franpipe

Europipe II

Langeled

Tampen Link (FLAGS)

Gjøa (FLAGS)

Snøhvit

Kilde: OD; Gassco

Norge har vært gjennom en periode med rask vekst i gass-produksjon og tilhørende oppbygging av infrastruktur

Norway has had a rapid growth both in gas production and build-up of gas infrastructure

Production from existing fields and discoveries is expected to decline after 2020

0

 1

 2

 3

 4

 5

 6

 7

 8

 9

 10

Gjennomsnittlig gassfunn per brønnGSm3

Tidsperiode2006-20102001-20051996-20001991-19951986-19901981-19851976-19801971-19751966-1970

Excl Ormen Lange

Excl TrollIncl Ormen Lange

Incl Troll

Kilde: OD

Sirkelstørrelsen er proporsjonal med samlede gassfunn i 5-årsperioden

Regresjon som angir langsiktig trend ekskludert Troll og Ormen Lange

51137

243 197 204 166 118228

92

Antall brønner i 5-årsperioden

Størrelsen på et typisk gassfunn på norsk sokkkel har falt

The average size of gas discoveries has decreased, thus the need for coordination and joint development is increasing

New production from undiscovered resources could be located far from existing gas infrastructure

5

Norwegian Sea:

Barents Sea:

North Sea:

• 16 fields under development.

• 84 fields undergoing evaluation.

• New gas and oil infrastructure projects

in the Sleipner- and Tampen area.

• Several upgrading and robustness

projects, e.g. Kårstø expansion project,

Gassco Emden project.

• Polarled investment decision 1Q 2013.

• Barents Sea Gas Infrastructure (BSGI)

forum established.

Source: NPD, Gassco

Several field- and infrastructure development projects are ongoing on the NCS

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www.gassco.no

The Gudrun field will start the production in 2014. Light oil from Gudrun will be processed at Kårstø.

The Edvard Grieg and Ivar Aasen fields are planning export of gas via the SAGE system to UK with start-up in 2015 and 2016 respectively.

Johan Sverdrup, one of the largest discovery ever made on the Norwegian Continental Shelf, is planned to start-up in 2018. The gas and oil export solutions are currently being studied.

WEST CABLE

LUNO

DRAUPNE

APOLLO

On the Utsira High in the North Sea significant oil and gas discoveries have been made - after 40 years of exploration

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www.gassco.no

One of Europe’s largest industrial projects the next years. First crossing of Artic circle with a subsea pipeline. Deepest field development and pipeline on NCS. Investment decision 1Q 2013, start-up 2016.

Extending the gas value chain northwards

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www.gassco.no

Source: NPD

9

Development of the resources in the Barents Sea require infrastructure solutions

Several promising discoveries are made in the Barents Sea the recent years.

The industry interest and expectations in the Barents Sea is high.

The exploration activity in the Barents Sea is extraordinary high.

Long distance to existing infrastructure require development evaluation in an area perspective.

Undiscovered resources per area

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Observers

Gassco has together with the industry started a significant work program for the Northern areas

Barents Sea Gas Infrastructure Forum

Oil & gas companies

Project support

Technology neutral evaluation of transport solutions

Focus on understanding of the transportation needs in and from the Barents Sea

Evaluation of applicable transport solutions for different resource and market scenarios

Potential gas production from the Northern areas for different resource outcomes Maximum daily production, MSm3/day

0

50

100

150

2040 2035 2030 2025 2020 2015 2010

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Significant exploration programs - will yield new information on resources

1

Gas dicoveries Oil discoveries Prospects 12

Norvarg/ Ververis

Snøhvit

Low: 50 GSm³ Medium: 100 GSm³ High: 150 GSm³

100 GSm³

Existing discoveries may justify a new gas transport solution - Illustrative transport costs from the Barents Sea, tariffs in NOK/Sm3

2

Nyhamna

Åsgard

Polarled

Melkøya

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Impact of and on existing system – gas resources from the north will impact the investment decisions

3

Description

• The supplies from existing areas indicate a gradual decline of the utilization of Kårstø from 2021 and onwards

• Investments to maintain capacity or shut in capacity will be dependent on additional resources

• The utilization of the Heimdal-Vesterled-St.Fergus chain is dependent on new resources after 2020

• Investments required in the Heimdal-Vesteled-St. Fergus chain. Decisions dependent on the utilization of the infrastructure

Kårstø

Heimdal/ Vesterled/ St. Fergus

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Polarled precedence: 8-10 years to startup

2008 2009 2010 2011 2007 2016 2017 2012 2013

Halten-Nordland

Area Study

• Victoria • Aasta Hansteen • Linnorm

NSGI Pre Feasibility (DG1)

• Victoria • Aasta Hansteen • Linnorm

NSGI Feasibility (DG2)

• Aasta Hansteen • Linnorm • Constrained

Area B volumes • Upside

volumes: Gro, Dalsnuten

NSGI Concept decision (DG3)

• Aasta Hansteen • Linnorm • Zidane • Constrained

Area B volumes • Upside

volumes: Asterix, Gro

NSGI FEED (DG4)

• Aasta Hansteen • Linnorm • Zidane • Fogelberg (not

part of DG4 decision)

• Constrained Area B volumes

Production startup

• Polarled startup Oct. 2016

• Kristin volumes from Oct. 2016

• Aasta Hansteen startup Q3 2017

4

15

BSGI Forum

FEED Concept selection

Confirm feasibility

Further mature the resource basis in the Barents Sea and evaluate the need

for increased export capacity

2014 2015 2016 2017 2013

Establish sponsor group

2021

~25 wells drilled – new discoveries

Apollo

Atlantis

614 ?

Wisting

NorvargAppraisalNorvarg

Appraisal

Darwin

Nunatak

Skavl

Kramsnø

Iskrystall

Bønna

Ensis

Byrkje / Gloppen

Askepott

Barents Sea Exploration program

2013/2014

Norvarg

Snøhvit

Ververis

Gamma

Skalle

Alke Nord & Sør

Selina

Goliat

Skrugard & Havis

Nucula

GothaSnabb /Kart

Komag/Lavvo

VerverisAppraisal

606

Formica

Saturn

Neiden

Skårungen

Aurelia

Barents Sea Southeast opening

NPD Barents Southeast est.

Awards 22. license round

Awards 23. license round

New Barents gas transport

Barentshavsrør:

24 MSm3/dag i 2022,

utvidelse til 38 MSm3/dag

rundt 2025

NSGI-rør:

70 MSm3/dag i 2016

Nyhamna

Åsgard-området

Norskehavet Frontier

Barentshavet Sør

Barentshavet

Nord

Barentshavet Nytt

område

Norskehavet Nord-

Ø

s

t Norskehavet Sub-basalt

Ny

infrastruktur

fra

uåpnede

områder

Ny

infrastruktur

Potential timeline of events

Indicative Barents Sea infrastructure schedule

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How we work

Barents Sea Gas Infrastructure Forum (steering committee)

BSGI secretariat (Gassco)

NCS synergies Northern Area considerations

Technology Resources and

production Gas transport

solutions Market

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Illustration of potential transport solutions for the northern area

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350

440

650

660

707

814

840

880

1200 Langeled

Barents sea pipeline 1000

Statpipe

Franpipe

Zeepipe I

Åsgard Transport

Europipe I

Europipe II

Norpipe

Vesterled • Heimdal – St. Fergus 1978

Route Startup year Length in kilometers Pipeline

• Ekofisk – Emden 1977

• Kårstø – Dornum 1999

• Draupner – Dornum 1995

• Åsgard – Kårstø 2000

• Sleipner – Zeebrugge 1993

• Draupner – Dunkerque 1998

• Statfjord – Kårstø – Ekofisk 1985

• Melkøya – Åsgard Transport ?

• Nyhamna – Easington 2007

A potential Barents Sea pipeline vs. other NCS pipelines

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Development of new oil and gas resources are dependant on cost effective solutions

Gasscos role is to contribute to maximize the value creation from the petroleum resources on the Norwegian Continental Shelf

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