DONG acquires stake in one of Norway's largest gas fields

DONG has acquired BP's 10.34% interest in the Ormen Lange gas field in Norway for $1.2 billion. The transaction also includes BP's 10.2% interest in the Langeled export pipeline.

Nov 23rd, 2004

DONG has acquired BP's 10.34% interest in the Ormen Lange gas field in Norway for $1.2 billion. The transaction also includes BP's 10.2% interest in the Langeled export pipeline.

In recent years, DONG has built up a portfolio of production and exploration licences in Norway, which accounts for 40% of current production. The Ormen Lange acquisition demonstrates the company's commitment to the Norwegian continental shelf, and will form the basis for continued strong growth in Norway. DONG is committed to supporting the Ormen Lange project and is looking forward to working with the partners to ensure a successful development.

Ormen Lange was discovered in 1997 and is the second-largest gas field in Norway. The development plan for the field was approved in spring 2004. Production start-up is scheduled for late 2007, with production lasting at least until 2040. Norsk Hydro and Norske Shell will operate the development and production phases, respectively. The gas will be exported through a new 1,200 km pipeline, Langeled, to the UK or via the Norwegian Sleipner field to the continent through existing pipelines.

The Langeled pipeline will be integrated into the Norwegian gas export infrastructure Gassled, resulting in DONG becoming a partner in Gassled. The Gassled system offers an attractive stable long-term return and flexibility with respect to the destination of the gas, which, in combination with the company's other gas supplies, pipelines, and storage facilities, offers the potential for value creation through utilization of flexibility and swaps.

The transaction will be effective from Jan. 1, 2005, subject to approval by the Norwegian authorities. The Norwegian State, through Petoro, has a 40-day option to pre-empt the transaction.

11/23/04

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