Bloomberg News

Hydro Says New Norway-U.K. Gas Pipe to Open Oct. 1 (Update2)

September 01, 2006

Norsk Hydro ASA (NHY), Norway's second-largest oil producer, said a new pipeline that will transport Norwegian gas to the U.K. will open Oct. 1.

The pipeline can deliver 70 million cubic meters of gas a day, the company said, about 20 percent of demand in Britain, the European Union's biggest market for the fuel.

The pipeline eventually will ship gas from the Norsk Hydro-operated Ormen Lange field in Norway to Easington on England's eastern coast. Until the field starts producing in about a year, the pipeline will ship gas from other Norwegian producers.

``The project is on schedule,'' Vegar Stokset, a Norsk Hydro spokesman, said by phone today. ``We will have commercial gas on Oct. 1.'' Commissioning will begin in September, he said.

Gas prices have risen an average of 60 percent in the past year in the U.K. because power plants, factories and households rely more on imports and gas stored underground as production declines in the North Sea.

The pipe's owners, include Statoil ASA (STL), Norway's largest oil company, and Exxon Mobil Corp. (XOM:US), the world's biggest, and Royal Dutch Shell Plc. (RDSA)

Centrica Plc (CNA), the U.K.'s biggest energy supplier, will operate the Easington terminal in the U.K., which will receive gas from the Langeled pipeline.

``We will be gearing up to prepare for operations during September, ready for commercial gas flow in October,'' Andrew Hanson, a Centrica spokesman, said by phone today.

To contact the reporter on this story: Renee Lawrence in London at rlawrence7@bloomberg.net

To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net


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