Aggregate Norwegian production was 10.1 bcm in April, down by 0.44 bcm y/y (4%) owing to heavier summer maintenance, unplanned constraints, and lower European demand. Despite heavier y/y maintenance constraints scheduled in May, higher y/y exports to Europe so far this month have led us to revise our 2018 forecast upward to 123.5 bcm.
Norwegian summer maintenance only cut April production capacity by 0.19 bcm, which was still 41 mcm more y/y. The primary reason production fell y/y by a larger 0.44 bcm was several unplanned maintenance constraints. Technical problems cut processing capacity from the Kollsnes facility by 17-23 mcm/d over 14-28 April, and production capacity from the Skarv field was cut by about 7 mcm/d over 20 April-5 May. Unplanned constraints also curbed Karsto processing capacity on several days last month, as well as production capacity from Troll and Heimdal on a few days.
So far in May, output from flexible fields appears to be higher y/y, keeping pipeline deliveries to Europe brisk despite heavier maintenance than in May 2017. Planned maintenance is scheduled to cut production and processing capacity by 1.42 bcm—63 mcm more y/y—with daily constraints nearly unchanged y/y in the first half of May. However, total Norwegian pipeline receipts averaged 0.30 bcm/d on 1-15 May, up by 29 mcm/d (11%) y/y. There are several competing explanations for this trend. Crude loadings from Oseberg and Troll are scheduled to be lower y/y in May, which suggests that the offset in production has been coming from other sources. One potential source is the Nyhammna processing plant where new compressors were installed late last summer, as part of a project to boost Ormen Lange production back to its nameplate capacity of 65 mcm/d, up from the 45 mcm/d it has averaged in the last few years. However, Ormen Lange output is yet to show any notable increases since the installation in lagged field-level data. In fact, in March, the latest month for which field-level data are available, non-flexible fields like Kvitebjorn and Ormen Lange registered small declines. Alternatively, it is possible that Troll production has been higher y/y in the last two weeks. Troll production is expected to fall sharply in the second half of May due to scheduled maintenance, which is likely why crude loadings are lower y/y for May as a whole in the loading programme. The field is scheduled to go offline on 24 May, along with the Kollsnes processing plant.
Our forecast for total Norwegian production in 2018 is now 123.5 bcm, down by 0.6 bcm y/y but an upward revision from last month’s forecast of 123 bcm owing to very strong May receipts. For 2019, we are forecasting total production of 120 bcm, unchanged from last month.