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UPDATE 6-Norwegian oil, gas plants shut after tanker, frigate collide


Reuters Last Updated at 08-11-2018 19:40:12 IST
An oil tanker and a Norwegian navy frigate collided off Norway's west coast on Thursday, injuring eight people and triggering the shutdown of a North Sea crude export terminal, Norway's largest gas processing plant and several offshore fields.

The frigate, which recently took part in a major NATO military exercise, was aground, tilting on one side and slowly taking in water, live television pictures showed. The Norwegian military said it was attempting to save the ship.

"We are working on stabilising the vessel," Norwegian Navy Counter-Admiral Nils Andreas Stensoenes told a news conference, adding that the eight injured were all Navy crew. Some 137 crew were on board at the time of the accident.

"We are very glad that no lives got lost and that the injuries are not more serious than they are," he added.

Police and the national Accident Investigation Board were investigating the accident, which took place at 0326 GMT.

The tanker had left Equinor's Sture oil shipment terminal with a cargo of crude, and the facility would be temporarily shut as a precaution, the company said.

"The frigate was landing onshore very close to the terminal. It's all happened in our backyard. We cooperated with the police and other authorities, but in the end it would be our decision whether to reopen the terminal," Equinor spokeswoman Elin Isaksen said.

The Kollsnes gas plant, with a processing capacity of 144.5 million cubic metres per day, has also been shut, Equinor said. It was not clear when it would restart operations.

Kollsnes processes gas from the Troll, Kvitebjoern and Visund fields for Britain and the rest of Europe. Gas output from the Troll A platform had been shut, said Equinor.

UK wholesale gas prices were up ahead of news of the incident and increased further afterwards. Gas for immediate delivery was up 6.2 percent at 66.50 pence per therm at 1136 GMT. Norway is a major supplier of gas to Britain so big outages can impact UK gas prices.

Flows from Norway to Britain were down by 14-15 million cubic metres due to the Kollsnes outage.

"Norwegian outages due to the collision have prompted extra buying. The market was already quite bullish due to lower temperatures. It is also not clear how long they (the outages) will last," a British gas trader said.

OUTPUT LOSS

There was no sign of a leak from the Sola TS oil tanker, although it would return to port for inspection, the Joint Rescue Coordination Centre for southern Norway told Reuters.

The Sture terminal receives oil via pipelines from North Sea fields, including Oseberg, Grane, Svalin, Edvard Grieg and Ivar Aasen, which in turn is exported to global markets on tankers.

Oil output from the fields delivering to the Sture terminal was around 350,000 barrels per day in August, the latest data available from the Norwegian Petroleum Directorate showed.

Oil consultancy Rystad Energy said it expected some 365,000 bpd of oil production would be shut for five to seven days with two to three cargoes to be delayed from Sture, causing only a brief upwards impact on Brent prices.

"The risk of a prolonged shutdown and delayed resumption of operations is deemed to be low, although oil markets will face difficulty replacing Grane heavy oil blend during November," said Rystad Energy's head of analysis, Per Magnus Nysveen.

The outage would likely reduce the daily average production of Oseberg Blend and Grane Blend in November by approximately 85,000 bpd, he said.

The Sture terminal has a capacity to store one million cubic metres of crude oil and 60,000 cubic metres of liquefied petroleum gas in rock chambers.

LPG mix and naphtha are also exported from the terminal via the Vestprosess pipeline to the Mongstad oil terminal.

It was not clear for how long the Sture terminal would remain closed, said Equinor, adding that oil output from Oseberg and Grane, which the firm operates, was shut as a result.

Oseberg is one of the crude streams underpinning the global Brent oil benchmark. Brent crude futures were down 21 cents at $71.86 a barrel by 1249 GMT.

Output at Ivar Aasen also been shut, operator Aker BP told Reuters. Production at the Edvard Grieg field was also shut, a source with knowledge of its operations said.

The Sola TS, an Aframax class vessel built in 2017, belongs to Tsakos Energy Navigation, the company's website says.

(Additional reporting by Camilla Knudsen, Nerijus Adomaitis and Nina Chestney, writing by Gwladys Fouche, editing by Raissa Kasolowsky and David Evans)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


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