Statoil Scraps KGEP Pipeline in Norwegian Sea on Costs

Statoil, Petoro and GdFS decided to terminate the Kristin gas export project (KGEP) in the Norwegian Sea, in light of unsustainable economics due to increased investments costs and increased risk to volume availability.

"It is a necessary decision that has been taken by the KGEP partners. With the deteriorating project economics, we did not see grounds to continue the KGEP development," Polarled development project director Håkon Ivarjord said in a note released on Thursday.

The $324 million KGEP project is a 30-kilometre pipeline connecting the Kristin field to Polarled.

According to Norway’s Statoil, KGEP represented less than 5% of the Polarled volumes and the termination does not influence the Polarled project execution.

The partners clarified that they would reassess the decision in the future, as ‘necessary connection points continue to be part of the project.’

Statoil holds a 53.4% working interest, Petoro 35.6% and GdFS 11%.