Statoil To Drill New Injection Well To Restore Gas At Snohvit

Norwegian oil giant, Statoil (OL:STL) ASA (NYSE:STO) , is on track to drill a new injection well for CO2 gas on the Snøhvit field, off the coast of Hammerfest. The company is using the drilling rig, Songa Enabler, for this purpose.

Subsequently, a production well will be spud to replenish gas for Hammerfest LNG. So far, Snøhvit is the only LNG project in the world that can capture and store CO2 separated from the well stream in a dedicated formation offshore.

To date, more than four million tons of CO2 have been stored from Snøhvit. The stored CO2 is being examined to make sure that it does not mix with the main producing reservoir. Also, the company now needs a new CO2 injection well.

After the installation of the new CO2 injector, the rig will be used to drill the first new production well at Snøhvit since 2007, when the field was brought online. This drilling campaign is intended to last until Christmas.

In 2013, the CO2 solution project was established to construct and set up a new CO2 injection well and replace the original injector that would subsequently leak CO2 into the gas reservoir on the Snøhvit field.

A widespread marine campaign was carried out in the summer of 2015. Pipelines and a template for the CO2 project were installed and tied in to the existing subsea facility on the Snøhvit field. That apart, the new subsea facility was built and installed. The installation was well within the budget of NOK 2.5 billion.

Development of Askeladd field, which is part of the plan for development and operation of the Snøhvit license is the next big development step for Hammerfest LNG. Askeladd field is expected to be commissioned in 2020–2021. This development step will ascertain the full utilization of the capacity at Hammerfest LNG.

Statoil currently carries a Zacks Rank #3 (Hold). Some better-ranked players from the energy sector include Sasol Ltd. (NYSE:SSL) , Enbridge, Inc. (NYSE:ENB) and Total SA (TO:TOT) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).