By Lefteris Karagiannopoulos
OSLO, Feb 27 (Reuters) - Royal Dutch Shell aims toboost output and recoverable reserves from its Ormen Lange gasfield off Norway by installing subsea compressors, the head ofits Norwegian operations said on Wednesday.
Output from Shell-operated Ormen Lange, Norway'ssecond-largest gas field and one of the key external gas supplysources for Britain, has been gradually declining since its 2012peak.
The company postponed plans to artificially increase thefield's pressure to pump out more gas in 2014 due to high costs.
With costs having fallen since, the company and itspartners, including Norway's Equinor and ExxonMobil, now aim to choose between two proposals to improveoutput and recoverable reserves, said Rich Denny, head ofShell's operations in Norway.
The proposals are from OneSubsea, a Schlumbergercompany, and TFMC. The Ormen Lange partners plan to maketheir selection this year, with implementation in the 2020s.
"That will increase the ultimate recovery ... Bringingcompression in will (also) increase the annual output andeffectively will extend the field life by keeping the annualoutput going for longer," Denny said.
He declined to specify how big the expected increase inrecovery rates or production volumes would be, but said thedifference would be "material".
Ormen Lange produced 15.7 billion cubic metres (bcm) ofnatural gas in 2018, down from a peak of 22.2 bcm in 2012.
In January, when the firm announced its intention to revivethe project, it said it had managed to reduce costs by more than50 percent compared to the first time it considered offshorecompression for Ormen Lange.
Costs in subsea gas compression installations can vary,however. A similar Equinor project at the Gullfaks field in 2015set the firm back $2.4 billion.
Denny said Shell, which sold its shares in the Draugen andGjoea fields to OKEA, planned to keep its stakes in the OrmenLange field, Nyhamna gas processing field as well as Norway'slargest gas field Troll.
"That will provide us with a stable well-run cash flowcoming from Norway, to build new opportunities from that, eitherin oil and gas or in new energy such as offshore wind, dependingon how that business matures," he added.
Earlier this year, Shell decided to invest in a smallfloating offshore wind project that will test new technology inNorway by 2020, together with Germany's Innogy andDenmark's Stiesdal Offshore Technologies.(Editing by Nerijus Adomaitis and Mark Potter)
