By Kjetil Malkenes Hovland
OSLO--The Norwegian government Friday granted Talisman Energy
Inc. (TLM) planning permission to construct a new pipeline that
will connect the North Sea Varg field to the U.K.
The six-kilometer pipeline is expected to export up to 1.2
million cubic meters of gas a day from December 2013. It will take
the gas to the Talisman-operated Rev field, via the BG Group PLC
(BG.LN)-operated Armada field and on to the U.K., the Ministry of
Petroleum said.
"Varg gas export is an economically profitable project that will
contribute to increased production and a longer life for the Varg
field," said Minister of Petroleum and Energy Ola Borten Moe.
The pipeline investment is estimated at NOK 700 million ($122
million), the ministry said.
The Varg field is expected to contain between 1.4 billion cubic
meters and 1.7 billion cubic meters of gas, or a little more than
1% of Norway's 2012 gas output. It has been in production since
1998 and is now in tail production. It has mainly operated as an
oil field during that time due to lack of the necessary
infrastructure needed for the recovery of gas.
Increasing the recovery rate on existing fields is important to
maintain Norway's production, Mr. Moe added. In 2012, Norway
produced 3.86 million barrels of oil equivalent, 15% below its 2004
peak.
Talisman has a 65% ownership stake in the Varg field. Norway's
state-owned oil company Petoro AS has a 30% stake, and Det norske
oljeselskap ASA (DETNOR.OS) owns 5%.
Write to Kjetil Malkenes Hovland at
kjetilmalkenes.hovland@dowjones.com
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