Norwegian explorer Equinor has entered into an agreement to acquire Shell’s equity in and operatorship of the Linnorm discovery in the Norwegian Sea.
Under the deal, Equinor will acquire a 30% interest in license PL 255 covering the Linnorm discovery, conditional upon taking over the operatorship from Norske Shell. Terms of the transaction were not disclosed. The deal is expected to close during the first quarter of 2024.
“Through this acquisition Equinor will deepen our position in the Halten area, in line with our strategy to optimize our portfolio on the NCS (Norwegian Continental Shelf),” said Kjetil Hove, executive vice president for exploration and production Norway in Equinor. “We know this area well, where we already have producing hubs and still see attractive opportunities.”
The Linnorm discovery was proven in 2005 and is the largest undeveloped gas discovery on the NCS. It is in the central part of the Norwegian Sea, 50 km northwest of the Draugen field in a water depth of around 300 m.
The discovery is estimated to contain from 25 to 30 billion m3 of recoverable natural gas resources. By comparison, this is more gas than remaining reserves in each of the producing fields Aasta Hansteen, Martin Linge, and Gina Krog.
The reservoir contains relatively dry gas with high CO2 content, which makes it a challenging field to drill and produce. The high-pressure/high-temperature reservoir is in the Ile, Tofte, and Tilje formations of Early to Middle Jurassic age, and has variable quality.
“A lot of good work has already been done to mature Linnorm,” added Hove. “Together with our partners, we will build on this and develop the Linnorm gas resources for the European market.”
In 2021, Shell and its partners made the decision to pursue a spar-based floating platform solution for the development. TechnipFMC was awarded a front-end engineering and design contract with an option for possible continuation to also include construction and installation. An impact assessment program was launched shortly thereafter.
In mid-2022, Shell said that it would not continue with plans to develop Linnorm as a standalone field.
Equinor will continue to evaluate a tieback for Linnorm to the Equinor-operated Kristin or Åsgard B installations.
Shell Norway Managing Director Marianne Olsnes said the decision to sell its position in Linnorm does not impact the company’s ambition to maintain a material upstream position in Norway and contribute to the development and transition of the NCS.
The deal is conditional on the approval of the Norwegian authorities.
The partners in PL 255 are A/S Norske Shell (30% and operator until the transaction is completed), Petoro (30%), Equinor (20%), and TotalEnergies EP Norge AS (20%).
