Dong gambles on giant gas field
21/12/2009 - the Copenhagen post
Energy company ploughs 800 million kroner into investigating the enormous Svanefelt gas field
Dong Energy has taken a step further towards developing the tricky Svanefelt gas field, which has been judged to hold enough gas to supply Denmark for 30 years, reports trade publication Ingenioren.
The challenge in exploiting the Svanefelt is that it is extremely deep, lying around 5900m under the North Sea. At that depth, the temperature is 190°C and the pressure 1000 bar, which puts heavy loads on drilling and measuring gear.
But the field, which was discovered in 2002, will now be more closely examined by Dong. The company has a concession on exploiting the field and has recently decided to commence preliminary drilling into the sandstone at a depth of approximately 6km.
Jesper Norrelund, who is responsible for Dong Energy's Danish oil and gas activities, said the planned drilling would procure knowledge of exactly how big the field actually was and whether it would be possible to produce sufficient amounts of natural gas to make it economical to develop it.
Preliminary drilling is expensive and complicated however. Although Norrelund said the field was likely to be lucrative, the cost of exploring it will be between 600 and 800 million kroner and it will take a year's worth of planning and preparation.
A large part of the cost is getting specialised steel alloys in the drilling bores and other equipment which can take a very long time for delivery.
Another difficult factor is the sandstone reservoir where the gas is found. It is very compact and contains few pores through which the gas can stream. It is therefore necessary to break it up by using fluid under high pressure.
Dong Energy's decision to continue exploring the Svanefelt has been taken at a time when natural gas prices are extremely low.
But Norrelund pointed out that the future development of gas prices will be analysed only after a decision about the exploration had been made.
'The decision about an eventual development is taken after a year, and by then gas prices could have changed a lot compared to now,' he told Ingenioren.
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