Upstream

Bayerngas provides its partners with access to the upstream business.

The trend in the market for gas sees added value moving increasingly towards the sources of gas. In order to participate in the upstream value added stage, to diversify its procurement strategy further and to make a greater contribution to security of supply, Bayerngas has taken the following steps:
• It has entered the Norwegian exploration and production segment through its affiliate Bayerngas Norge AS, Oslo,
• It is examining the options arising from new pipeline projects, such as NABUCCO.

The foundation of Bayerngas Norge AS sees Bayerngas become one of the few gas utilities in Germany to enter into the exploration and production sector (upstream segment). This demonstrates what municipal companies can achieve in the context of a partnership. This is because:

• Holdings in gas fields are investment and risk intensive,
• and must be distributed across several partners.

Upstream Interests and Activities

In March 2006, Bayerngas founded Bayerngas Norge AS in Oslo, Norway. The objective of Bayerngas Norge is to acquire shares of licences that contain gas discoveries or are deemed likely to contain gas fields. Bayerngas Norge holds shares in 61 licenses. (incl. 1 as operator in the UK and 2 as operator in Norway.)

Natural Gas Production

In the search for natural gas deposits, the initial phase involves carrying out seismic (reflection measurements using sound waves) and geophysical analyses. If the results of these analyses indicate the presence of significant deposits, exploratory drilling is carried out. This is designed to provide information confirming the presence of natural gas and the viability of its extraction. Once evidence has been provided, the next step is to drill production wells to open up the find in preparation for full-scale production.

Example: Developing Vega South, in the Norwegian Sea

Figure 1: A mobile drilling platform is positioned over the field. The gas field is opened up by means of one (or several) bore holes, and one or several drill heads are then put in place.

Figure 2: The subsea system, a type of valve, is then installed over the drill head and the mobile platform is removed. Specially equipped ships are then used to lay pipelines connecting the well to production and processing plants or satellites (collection points). Depending on the depth of the water, this work carried out either by divers or submersible devices.

Figure 3: The gas/condensate/oil extracted is then pumped along the pipeline to the processing platform, where it is purified. The natural gas is distributed using pipelines and the oil is loaded onto tankers for shipment.

Advantages of the Subsea Completion

Subsea completion provides obvious advantages in that it facilitates the use of existing extraction structures, such as platforms, and enables the output from multiple bore holes to be bundled. As a result, it is a cost effective and rapid system for extracting natural gas and oil.