StatoilHydro: Natural gas – fuel of the future

Arctic Princess by the port at Melkøya, Hammerfest, Norway. Photo:

Arctic Princess by the port the liquefied natural gas (LNG) plant at Melkøya in Hammerfest, Norway. Photo:

“Natural gas is an attractive energy source for the future,” said Rune Bjørnson, StatoilHydro’s executive vice president for natural gas during a press seminar in Oslo on Sept. 24.

StatoilHydro is currently the second largest supplier of gas to Europe, and the group helps secure a stable supply of energy to Europe through export of gas from the Norwegian continental shelf (NCS), as well as holding significant international gas positions in Algeria, Azerbaijan and in the USA.

Rune Bjørnson put matters into perspective, pointing out the formidable growth in natural gas consumption in Europe from the 1960s to the present day. Fifty years ago, gas consumption was practically nil. Today, gas accounts for around 25 per cent of Europe’s total energy supply.

Natural gas currently accounts for 23 per cent of the total value of Norwegian exports. The value of gas exports reached NOK 218 billion in 2008, while total Norwegian exports were NOK 958 billion.

Global energy demand will continue to grow, driven by population growth and rising prosperity. The growth in demand will be highest in Asia, while demand for energy and gas will also increase in StatoilHydro’s main markets, Europe and the USA.

Rune Bjørnson, StatoilHydro's executive vice president for natural gas. Photo:

“I am convinced that natural gas will be a competitive energy source for many decades to come,” said Bjørnson.

He pointed out that natural gas is an important bridge towards a low carbon economy because it is the cleanest burning fossil fuel, with much lower emissions of greenhouse gases than coal and oil. Replacing older coal power plants with new gas power plants can reduce carbon dioxide emissions by as much as 70 per cent. Provided that all of StatoilHydro’s gas export from the NCS in 2008 substituted coal generated power in Europe, the total CO2 emission reduction would have been approximately 220 million tonnes. As a comparison, total Norwegian CO2-emissions were around 44 million tonnes last year.

Europe still uses more coal than gas to produce electricity. Gas from the Norwegian continental shelf is an attractive energy source seen in an overall climate perspective, thanks to low greenhouse gas emissions during production and its proximity to the market .

The NCS still holds substantial gas reserves in producing fields and proven reserves.

“But if we are to maintain our leading gas position, we must find more gas and develop new discoveries and fields on the NCS,” said Bjørnson. “Ultimately, this means that we need access to new acreage to ensure a stable flow of high volumes of gas from the NCS to Europe,” he stressed.

The development of commercial gas value chains is a strategic focus area for the company. StatoilHydro has a stake in the Shah Deniz field in Azerbaijan, which is currently being further developed and could create a basis for establishing a new gas corridor to Europe. Meanwhile, in the USA, the world’s largest and most liquid gas market, StatoilHydro is building its gas position through participation in shale gas (Marcellus), offshore gas production in the Gulf of Mexico, and by importing LNG to the US east coast.

“Natural gas is an important part of StatoilHydro’s business activities, and a crucial element in securing continued growth for the company,” said Bjørnson.


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