Outages at Norway's LNG Plant Deter Export Shipments to Asia

A lack of reliability in Norway's outage-prone liquefied natural gas export plant is preventing deliveries to Asia this year, one of its owners said, in the latest sign of disillusionment with the project.

Europe's only LNG-producing plant has been beset by technical faults since it started in 2007, partly due to its construction. The plant was assembled outside Norway and transported to its present location on a barge, which required a compact design that now makes repairs more lengthy.

In February this year a gas leak led to a two-month halt in production, and the plant shut again on May 28 due to a short circuit in the electrical unit of one of the cooling processors. It restarted this week.

So far this year, shipments from the plant have included five LNG cargoes to markets in Europe, two to South America and one to Asia, AIS ship-tracking data on Reuters showed.

"We can't send any cargoes from Snoehvit LNG to Asia because of the reliability problems there," an executive at one of the partners in the Snoehvit license said.

"We can't risk Asian customers not getting cargoes on time," he added.

Last year, Norway exported nine cargoes to Asia, independent LNG consultant Andy Flower said.

Norway's Statoil, which operates the plant and has a 36.79% stake in the license to produce gas from the Arctic Snoehvit field, said it has sent LNG to Asia this year.

Ship-tracking data showed the 160,000 cubic metre LNG tanker Soyo left Snoehvit in mid-January and arrived in South Korea in mid-February.

The data showed the another LNG tanker, the 150,000 cubic meter Arctic Princess, was heading to the Melaka import terminal in Malaysia.

Statoil's partners in Snoehvit include Norwegian state-owned Petoro, France's Total and GDF Suez, and German utility RWE.

Statoil last year postponed a decision on investing in a second LNG processing unit for the plant after its partners said the focus should first be on improving reliability of the existing unit.