Continuing to look for new ways to bring liquified natural gas (LNG) to the United States, Statoil said Tuesday that it has entered into an agreement that will have Algerian state oil company Sonatrach supply LNG to Statoil at the Cove Point terminal in Maryland under a three-year contract.
With deliveries commencing in December, the contract covers approximately 35.3 Bcf of natural gas annually over the life of the contract. Statoil said the Sonatrach agreement covers about 40% of the capacity available to Statoil at Cove Point, and supplements a similar deal concluded with Tractebel in September.
In September, Norway-based Statoil upped its stake in the U.S. LNG marketplace, setting up an agreement for Tractebel LNG North America to deliver 35.3 Bcf of natural gas per annum between 2003 and 2006 to Statoil Natural Gas LLC at Cove Point (see Daily GPI, Sept. 10).
Statoil already has a project in the works to supply up to 84.8 Bcf of gas a year from its Snoehvit gas field in the Barents Sea between 2006 and 2023 to domestic markets through the Cove Point terminal (see Daily GPI, Sept. 4). However, until that gas is flowing, Statoil said it would buy LNG from other producers to supply the Cove Point facility, where it has leased one-third of the capacity.
“We’re very pleased to have signed this contract,” says Otto Granli, Statoil’s vice president for LNG marketing and shipping. “It helps to underpin our strategy of maintaining a continued commitment to the LNG market.”
Cove Point’s capacity is shared on an equal basis between Statoil, BP and Shell. Owned by Dominion Resources, the terminal reopened in mid-August after being mothballed since 1980.
Established as the group’s U.S. gas marketing and trading arm, Statoil Natural Gas LLC is based with Statoil’s other American operations at Stamford, CT.
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