Norsk Hydro ASA · OSL:NHY
Norsk Hydro ASA — European Gas Conference 2003
14 slides from Norsk Hydro ASA's conference presentation, May 15, 2003
Slide 1: The Development and Marketing of a New Gas Giant for Europe: The Ormen Lange Challenge
The Development and Marketing of a New Gas Giant for Europe: The Ormen Lange Challenge Eivind Reiten President and CEO, Norsk Hydro European Gas Conference 15 May 2003
Slide 2: Ormen Lange – Planned Production Start
Ormen Lange – Planned Production Start 2007 Reserves: 375 bcm Gas Production: 15-20 bcm/year Sub Sea Production Depth: 800-1000 m Ormen Lange Norsk Hydro Share: 18% (Operator Development and Construction Phase) Norway Other Partners: Shell (Operator Production phase), BP, Statoil, ExxonMobil, Petoro
Slide 3: Ormen Lange Development Concept
Ormen Lange Development Concept: Subsea Production with Onshore Processing and Export Plant Nyhamna Multiphase transport Gas export Steep and uneven terrain Seabed development (800-1000m deep)
Slide 4: Tie-in at Sleipner Provides Key Flexibility
Tie-in at Sleipner Provides Key Flexibility ● New 20 bcm/yr. Ormen pipeline planned Lange Tjeldbergodden Nyhamna for UK Norway Oseberg Kollsnes ● Southern leg Frigg Heimdal ready 2006 d Kårstø le er st Ve Sleipner St. Fergus ● Gas can be routed to either the UK or Easington Continent Dornum Emden Ge
Slide 5: European Supply and Demand Balance
European Supply and Demand Balance 800 700 ● Continent 600 well-supplied bcm (100% ACQ) 500 until ca. 2010 400 ● Stable demand 300 growth 2.5% 200 p.a. 100 ● Import 0 dependency to increase 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 19 19 19 19 19 20 20 20 20 20 20 20 20 20 20 20 Indigenous ava
Slide 6: UK Production and Norwegian Export Capacity
UK Production and Norwegian Export Capacity UK net 140 importer ! UK production 120 declining 100 ! Demand 80 growth: 1-2% b cm p.a. 60 40 ! Gas imports 20 rising 0 02 03 04 05 06 07 08 09 10 11 12 13 14 15 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Approved Probable Yet to Find&Technicals Vesterled
Slide 7: New Norwegian Supplies to UK are Competitive: Cost Stack
New Norwegian Supplies to UK are Competitive: Cost Stack* Qatargas 2 (LNG) West of Shetlands Yamal-Nenets Algeria LNG Ormen Lange Norway CNS** 0,00 0,50 1,00 1,50 2,00 2,50 3,00 3,50 **New Norway Central North Sea $/mmbtu Source: Wood Mackenzie * Delivered to UK NBP (November 2002)
Slide 8: NBP Trading Versus Physical Demand
NBP Trading Versus Physical Demand Average 2002 ● NBP is benchmark value of gas 700 Financial 600 volume ● UK market is highly 500 liquid " Minimal volume risk bcm/yr 400 300 Traded ● Size of UK financial 200 volume market comparable to 100 physical European 0 demand Physical UK Traded UK Physical E
Slide 9: Hydro's Oil & Gas Production Growing Strongly
Hydro’s Oil & Gas Production Growing Strongly 1 000 boe/day 700 R* 8% 600 C AG 500 400 300 200 100 0 E E 98 99 00 01 02 E E 03 04 05 06 19 19 20 20 20 20 20 20 20 Oil NCS Oil Int Gas *Compound Annual Growth Rate, 2001 baseline
Slide 10: Hydro's Gas Production to Overtake Oil in a Decade
Hydro’s Gas Production to Overtake Oil in a Decade % Hydro's Oil & Gas Production (Worldwide) 100 80 Gas' share 60 40 20 0 2000 2005 2010 2015
Slide 11: Ormen Lange will Strengthen Hydro's Gas Position in Europe
Ormen Lange will Strengthen Hydro’s Gas Position in Europe Åsgard Ormen Lange ● Production growth ● Diverse and flexible Troll supply portfolio Oseberg ● Enhance position in Sleipner European energy St. Fergus market Emden Bacton Sluiskil Zeebrügge Dunkerque
Slide 12: Norsk Hydro's Equity Gas Set to Double between 2002-2010
Norsk Hydro’s Equity Gas Set to Double between 2002-2010 14 ● 2002 Hydro 12 production: 6.4 bcm 10 Uncommitted volumes (est.) ● 2010 production: b c m /y r. 8 approx. 13 bcm 6 Existing long term ● 2010: roughly 25% 4 Existing long term commitments commitments of equity gas from 2 Ormen Lange 0 2003
Slide 13: Conclusions
Conclusions ! Strong growth in Hydro’s oil & gas production, both in Norway and internationally ! Hydro has met the major technological and commercial challenges connected with Ormen Lange, and has kept project on schedule ! Ormen Lange enhances Hydro’s position as a flexible supplier, well-position
Slide 14: Safe harbour statement
Safe harbour statement In order to utilize the "Safe Harbour" provisions of the United States Private Securities Litigation Reform Act of 1995, Hydro is providing the following cautionary statement: This presentation contains certain forward-looking statements with respect to the financial condition