From: Reuters
Published May 30, 2008 08:52 AM

Norway curtails Snoehvit CO2 emissions exemption

By Aasa Christine Stoltz

OSLO (Reuters) - Norway's environmental authorities have denied StatoilHydro's application for an unlimited exemption to emissions limits from a gas plant in the Arctic but gave it a two-month extension, officials said on Friday.

The liquefied natural gas (LNG) plant serving the Snoehvit field in the Barents Sea has had teething problems since production began in September last year and has had an exemption to normal emissions limits in the start-up phase.

The starting phase at the plant at Hammerfest on Norway's far-northern coast was estimated to last up to 10 months from August 21 last year, but in January the company applied for an unlimited extension of the exemption period.

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"We believe it is necessary to put a time limit on the start-up phase by Hammerfest LNG," Norwegian Pollution Control Authority (SFT) Director Signe Naamdal said in a statement.

"We will therefore reject the application, but allow a two-month extension until August 21, 2008."

StatoilHydro said it would act according to the SFT's requirements, and that it expected to be able to stay within limits for emissions once the plant is fully operational.

The company also said the SFT's decision would not affect costs related to the facility in any way.

"We have not finished our work to get the facility in a stable situation," StatoilHydro spokesman Sverre Kojedal told Reuters.

"But from experience, we have reason to believe that we will be able to run the facility after the start-up phase within allowed emissions given for ordinary operation," Kojedal said.

"We are in the middle of a review stoppage, and when this has finished in the beginning of July, we will again start the facility and continue testing...of our systems," he said.

FLARING LIMITATIONS

Flaring of gas at the plant was the main contributor to a nearly 3 percent rise in Norway's greenhouse gas emissions in 2007, Statistics Norway said earlier this month.

"It is very regrettable that emissions from flaring at the plant have been significantly higher than we were presented with beforehand and that the start-up time was not sufficient," Naamdal at SFT said.

The SFT also said it would put forward demands to limit emissions from gas flaring at the Hammerfest LNG plant and that the company should move ahead with technical studies into carbon capture and storage for the facility.

"Carbon dioxide emissions are regulated through the quota system," it said, adding StatoilHydro had to buy quotas for extra emissions from flaring from the beginning of this year.

StatoilHydro said the plant was no longer flaring excess gas, because the amount brought on land and the capacity to handle it is in balance.

SFT said the two-month extension would not have "significant environmental consequences."

Shares in StatoilHydro rose 2 percent to 197.50 crowns on a rising Oslo bourse by 1210 GMT (8:10 a.m. EDT), valuing the group at about $122.7 billion.

(Editing by Sue Thomas)

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