Bengt Lie Hansen Senior Vice President Hydro Oil

Bengt Lie Hansen Senior Vice President, Hydro Oil & Energy The Giant Ormen Lange Field Development Hydro’s model for arctic offshore projects World Gas Conference Amsterdam, June 6 th 2006

Ormen Lange paves the way to an exciting future l l l Ormen Lange field, discovered 1997 Large technological challenges in deep water solved in time Hydro has operator responsibility for the development amounting to USD 10 billion The gas is brought ashore for processing in Norway and piped 1200 km to the UK To come on stream in 2007 LHB • Date: 2005 -06 -07 • Page: 2 • Hydro Oil & Energy

Ormen. Langeto securing Ormen supply Europe’s largest gas market l Hydro’s Ormen Lange project will secure 20% of UK’s gas demand l Will make Norway the second largest gas supplier in the world after Russia l Probably the most challenging gas development globally today Source: Global Insight (July 2005) LHB • Date: 2005 -06 -07 • Page: 3 • Hydro Oil & Energy

Key technology challenges Offshore l Extremely uneven seabed for subsea- and pipeline design and installation l Main production area in an avalanche / slide area l Extreme temperatures, minus 1. 2°C at seabed l Challenging waves and winds l Strong current l 850 – 1100 metres water depth l High subsea production l Long tie back LHB • Date: 2005 -06 -07 • Page: 4 • Hydro Oil & Energy

Ormen Lange Field Location n Storegga slide area (8200 years ago) n Only a new ice age will bring about the conditions for new large scale slide LHB • Date: 2005 -06 -07 • Page: 5 • Hydro Oil & Energy

Storegga slide edge -250 m Control umbilicals and MEG lines 2 x 30" multiphase lines Templates A & B -850 m Templates C & D LHB • Date: 2005 -06 -07 • Page: 6 • Hydro Oil & Energy

Ormen Lange – technologically groundbreaking l All production templates sub-sea at 850 meter water depth l Rugged seabed with steep hills l Flow assurance in temperatures below zero Celsius l Future compression – sub sea system being qualified at Nyhamna l Largest sub sea development in the world LHB • Date: 2005 -06 -07 • Page: 7 • Hydro Oil & Energy

Ormen Lange - onshore processing at Nyhamna l Separation of gas, condensate and water l Remote operation of sub-sea installations 120 km offshore l Annual Export of 21 BCM l Ready for use in October 2007 LHB • Date: 2005 -06 -07 • Page: 8 • Hydro Oil & Energy

Langeled - breaking records from Norway to UK l The world's longest sub-sea pipeline system l First delivery of Norwegian gas to the UK this year l Ormen Lange gas will flow through Langeled October 2007 LHB • Date: 2005 -06 -07 • Page: 9 • Hydro Oil & Energy

Easington Receiving Facilities in the UK BP Centrica LHB • Date: 2005 -06 -07 • Page: 10 • Hydro Oil & Energy

Ormen Lange - on schedule and within budget 70% completed Offshore (62%) LHB • Date: 2005 -06 -07 • Page: 11 • Hydro Oil & Energy Onshore (60%) Langeled (79%)

Ormen Lange summary: - We are on schedule and within budget! Ø Ø Ø Well defined concept at time of decision Innovative and cost effective solutions Focus on risk management throughout execution Onshore experience from Sunndalsøra and Qatar Active stakeholder management LHB • Date: 2005 -06 -07 • Page: 12 • Hydro Oil & Energy

Shtokman – the offshore locomotive in the Arctic l l Mega project. Contains 3600 billion cubic meters of gas Size allows for own infra structure Shtokman is a door opener for further offshore developments in the region Shtokman can secure both US and European energy supply LHB • Date: 2005 -06 -07 • Page: 13 • Hydro Oil & Energy

Additional Challenges on Shtokman Beyond Ormen Lange Technical l Distance to shore - l l Flow Assurance Control of long tie-back wells Operational Gas Liquefaction LNG Offloading Health, Safety & Environmental (HSE) - Arctic environment Ice/Metocean - Design parameter Ice management LHB • Date: 2005 -06 -07 • Page: 14 • Hydro Oil & Energy

The Arctic: A strategic area for world energy supply l The arctic may contain 24 per cent of remaining undiscovered global resources * l US and EU looking for energy supply diversity l Ormen Lange – a model for future arctic projects *Source: USGS LHB • Date: 2005 -06 -07 • Page: 15 • Hydro Oil & Energy

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