“For the ORLEN Group Norway is a key market when it comes to securing natural gas supplies to Poland. We are persistently developing our production portfolio on the Norwegian Continental Shelf. In November, we signed an agreement to buy KUFPEC Norway, thanks to which, starting next year, ORLEN Group’s natural gas production in Norway will increase by one-third, to over 4 billion cubic meters per year. Among the acquired assets is the Gina Krog field. Once the transaction is completed, our share in this field will increase from about 11 to 41 percent. This year, the Gina Krog platform was connected to an onshore electricity grid powered by renewable energy, reducing carbon dioxide emissions associated with the operation of the Gina Krog installation by as much as 80% in 2024. Thanks to that, after the finalization of the acquisition of KUFPEC Norway, already two-thirds of our gas production in Norway will be carried out in a manner that ensures meeting ambitious climate targets set for the industry by Norwegian regulations. Thus, we are securing favorable conditions for our long-term presence on the Norwegian Shelf while at the same time achieving our strategic goals of increasing gas production and reducing carbon emissions associated with this activity,” says Daniel Obajtek, CEO of ORLEN.
The Gina Krog platform was connected to the Norwegian onshore electricity grid in October 2023 via the Johan Sverdrup complex. The electrification of both installations required laying ca. 260 km of high-voltage submarine cable. Supplying power from shore made it possible to reduce the carbon footprint of oil and gas production drastically. Without electrification, the energy required to operate oil platforms is generated by burning the extracted natural gas.
Switching the power supply to onshore electricity means transitioning to almost zero-carbon energy. As much as 98% of the electricity produced in Norway comes from renewable sources, with about 90% from hydropower. This will bring the emission intensity of production-related emissions at the Gina Krog platform in 2024 down to 0.7 kg of CO2 per barrel of oil equivalent, compared to 3.7 kg of CO2 per barrel in 2023. This way, ORLEN Group will abate about 18,500 tonnes of carbon dioxide emission associated with upstream activity on Gina Krog next year.
Once the acquisition of KUFPEC Norway is completed in late 2023 or early 2024, the Gina Krog field will be the primary gas-producing field of PGNiG Upstream Norway (PUN), ORLEN’s Norwegian upstream company. PUN estimates it will produce about 1.35 billion cubic meters of gas from Gina Krog, or about one-third of its total gas production, next year. In second place will be the Ormen Lange field, which will produce 1.1 billion cubic meters of gas in 2024 and is already electrified. Onshore energy also powers the infrastructure of the Duva field, from which the company plans to produce about 0.2 billion cubic meters of gas next year.
In total, as much as 2.6 billion cubic meters, or ca. 66% of the gas that ORLEN Group will produce in Norway next year, will be delivered using facilities powered by 98% renewable energy. Thanks to the electrification of the Gina Krog, Ormen Lange, and Duva fields, PGNiG Upstream Norway will avoid over 88,000 tonnes of CO2 emissions next year (compared to a scenario in which the burning of natural gas would power the production facilities at these fields).
ORLEN Group and its license partners are also planning electrification of the Fenris field and the Yggdrasil complex, which is currently under development. Connecting the Fenris and Yggdrasil infrastructure to the onshore grid before their start-up will help decrease (respectively) approximately. 1.6 and 9 million tons of CO2 emissions over the commercial lifetime of the fields, with approx. 1.1 million tons (0.35 and 0.75 million tons, respectively) attributable to PUN.
Despite the challenges and costs of laying submarine cables, electrification plays an important role in implementing Norway’s GHG reduction targets. According to the Norwegian government strategy, by 2030, the oil & gas exploration and production industry should reduce greenhouse gas emissions by 40 per cent from 2005. Electrification of upstream infrastructure is considered the most effective way to meet the country’s climate goals for the industry.
Companies operating on the Norwegian Continental Shelf, including PUN, also use other solutions to reduce their carbon footprint. One is to improve the efficiency of offshore production by connecting new fields to existing infrastructure. This helps to reduce the intensity of emissions per unit of hydrocarbons produced. In June of this year, PUN and its license partners received approval to develop the Tyrving field using the Alvheim area’s production facilities. This will result in a substantial reduction of GHG emissions intensity, which for the Tyrving field will amount to just 0.3 kg of CO2 for each barrel of oil equivalent (boe) extracted. In this way, PUN has already achieved a significant CO2 intensity reduction for Verdande (with a carbon intensity of 1.6 kg CO2/boe) or Alve Nord and Ørn (4.5 kg CO2/boe) fields.
Reducing the carbon footprint is also possible through efficiency improvements and technical modifications to various components of the upstream infrastructure used by PGNiG Upstream Norway and its license partners. This includes using generators and compressors with variable-speed drives (applied, among others, in the Skarv field production facilities), heat and energy recovery systems (Gina Krog, Skarv), energy-efficient heating of submarine transmission pipelines (Ærfugl) or optimization of production and processing with the advanced virtual copies of installations (the so-called digital twin -– Ormen Lange field and Nyhamna plant).
ORLEN Group is the first energy company in Central and Eastern Europe to declare the target of achieving carbon neutrality by 2050. According to the strategy, by 2030, ORLEN Group aims to reduce greenhouse gas emissions associated with oil and gas production by 25% compared to 2019 levels.