World trade in liquefied natural gas will get a boost as a result of developments in Norway, South Korea, and Algeria.
Norway's Den norkse stats oljeselskap AS disclosed negotiations are about to begin for the sale of gas from offshore arctic Norway to ENEL, the Italian national electrical power company.
In south Korea, Korea Gas Corp. signed contracts for long term and short term LNG supplies from Indonesia.
And in Algeria, state owned Sonatrach said a proposed contract to sell gas to the U.S. through a joint venture between Shell Oil Co. and Columbia Gas System Inc. is in an advanced stage of negotiations.
NORWEGIAN PROJECT
Statoil, which earlier in the year dropped its plans for LNG exports to the U.S. based on supplies from the North Sea, said ENEL is interested in LNG purchases based on Snohvit field on the Tromsoflaket.
The field, on the western edge of the Barents Sea in 900-1,110 ft of water, has 3.5 tcf of reserves and is capable of supplying an 8 billion cu m/year LNG export project. Negotiations with ENEL will center on a project of 4-5 billion cu m/year.
ENEL is the second Italian state company negotiating for Norwegian gas. SNAM, part of the ENI group, is still talking to Statoil as head of a Norwegian gas negotiating group, for as much as 5 billion cu m/year from the North Sea delivered to Northwest Europe through existing pipelines.
Talks for increased volumes of North Sea natural gas coincide with approaches from Algeria and Libya to boost deliveries from North Africa to Italy through proposed increased pipeline capacity under the Mediterranean.
While interest in Norwegian gas appears to be growing throughout Europe, not all negotiations are running smoothly.
For 5 years Norway and Sweden have been talking about a 2.5 billion cu m/year import deal that would require construction of a new pipeline into Sweden from the North Sea.
The contract would be part of Swedish efforts to find alternative energy sources that would allow a phaseout of the country's nuclear program by 2010.
Negotiations have been suspended until next February to enable the Swedish government to finish shaping an energy program that could postpone the nuclear energy phaseout.
Portugal's Petrogal also is interested in Norwegian LNG as supply for a natural gas grid proposed to link Lisbon with Oporto, Braga, and Coimbra.
Petrogal, in partnership with the Portuguese tanker company Soponata, Enagas of Spain, and SNAM of Italy, plans to build an LNG import terminal near Lisbon.
Petrogal said Algeria and Norway are under consideration as the source for 2-3 billion cu m required for the initial import supply.
KOREAN PURCHASES
Korean Gas Corp. signed letters of intent with Indonesia's Pertamina for short term supply of 3.5 million tons of LNG from Indonesia for delivery during 1992-95.
The short term contract will be replaced with a 20 year supply deal under which 2 million tons/year will be delivered starting in 1994.
The existing Korean supply deal with Indonesia also is being expanded. The 2 million tons/year supply deal, which still has 16 years to run, will be increased to 2.3 million tons/year.
Increased LNG imports will require a new import terminal at Inchon and improvements to Korea's gas distribution network.
The Korean government is anxious not to become too dependent on Indonesian supplies. Industry sources say that another deal could be signed that will make 1 million tons/year from Malaysia available beginning in 1992.
ALGERIAN NEGOTIATIONS
The statement from Sonatrach followed a meeting in Algiers with senior executives from Shell International Gas Co. and the two partners in the proposed new Cove Point Trading Co. joint venture, Shell Oil Co. and Columbia Gas.
Guidelines had been given to Sonatrach and SIG for speedy completion of a contract.
The meeting was scheduled before settlement of a long dispute involving ownership and sale of three tankers earmarked for use in U.S. LNG imports (OGJ, Oct. 1, p. 28).
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