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    Neptune Warns of Output Loss in Norway


While output could be cut for 12 months, the company says it is insured against financial losses arising from the fire at Hammerfest.

by: William Powell

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Liquefied Natural Gas (LNG), Europe, Premium, Corporate, Exploration & Production, Infrastructure, News By Country, Norway

Neptune Warns of Output Loss in Norway

UK explorer Neptune Energy said October 27 that its oil and gas output for the coming year would be below expectation, as the Hammerfest LNG terminal might not be operational until October 2021. However, new production elsewhere would partly offset the loss of Hammerfest, it said.

The Equinor-owned terminal, with design capacity of 5.6mn metric tons/yr, has been inoperable since a turbine caught fire September 28. As a result of this shutdown, Neptune now anticipates full year 2020 production will average 140-145,000 barrels of oil equivalent (boe)/day. In Q2 alone, output averaged 149,600 boe/d.

Revenue losses however will be recovered through business interruption insurance, claims for which are effective 60 days after the incident. Further insurance claims will be submitted for its share of repair costs, Neptune said.

Neptune has a 12% interest in the Hammerfest LNG plant at Melkoya, which processes gas produced from the Snohvit, Albatross and Askeladd fields.

Although 2021 revenues will be protected through business interruption insurance, production guidance for the year is currently under review, with losses from the outage at Hammerfest LNG plant expected to be partly offset by new projects coming online in Norway and Indonesia.