The Mongstad refinery, built in 1975, significantly expanded and upgraded in the late 1980s and subject to considerable investments over the last 15 years to meet new product specifications, is a medium-sized, modern and sophisticated refinery.

The refinery is directly linked to offshore fields through two crude oil pipelines and indirectly linked through an NGL/condensate pipeline to the crude oil terminal at Sture and the gas terminal at Kollsnes, making Mongstad an attractive site for landing and processing hydrocarbons and for further development of our oil and gas reserves. The main facilities at Mongstad, in addition to the refinery, are a crude oil terminal, owned 65% by StatoilHydro, and an NGL terminal, owned by Vestprosess, in which StatoilHydro has an ownership interest of 34%.

The refinery is owned 79% by StatoilHydro and 21% by Shell. We have a service agreement with Shell Global Solutions, a Shell subsidiary, which provides technical operational support, project development support and general technical advice to Mongstad.

Approximately 45% of Mongstad's total production is delivered to the Scandinavian markets and 55% is exported to north-western Europe and the United States.

The following table shows the approximate quantities of refined products (in thousand tonnes) produced at Mongstad for the periods indicated. As shown below, in addition to crude, the Mongstad refinery upgrades large volumes of fuel feedstock, NGL from Oseberg and Tune, and condensate from Troll, Kvitebjørn and Visund.

Mongstad product yields and feedstock	For the year ended 31 December
	2008		2007		2006
LPG	311	3%	373	4%	359	3%
Gasoline / naphtha	3,902	39%	4,721	43%	4,802	43%
Jet / kerosene	820	8%	755	7%	801	7%
Gasoil	3,680	37%	3,865	35%	4,050	36%
Fuel oil	485	5%	311	3%	302	3%
Coke / sulphur	190	2%	222	2%	231	2%
Fuel, flare & loss	575	6%	692	6%	620	6%
Total throughput	9,963	100%	10,939	100%	11,165	100%
North Sea crude oils:
Troll, Heidrun (FOB crude oils)	4,676	47%	4,751	43%	5,508	49%
Other North Sea crude oils (CIF crude oil)	3,072	31%	3,780	35%	2,616	24%
Residue	1,132	11%	1,265	12%	1,323	12%
Other fuel and blendstock	1,083	11%	1,143	10%	1,718	15%
Total feedstock	9,963	100%	10,939	100%	11,165	100%
Note: Changes in throughput and yields are partly due to maintenance shutdowns (e.g. major turnaround in 2008).

The Mongstad refinery is able to manufacture products to meet different specifications through its in-line blending during ship loading.

The refinery reliability (i.e. on stream factor) was high in 2006 and 2007, but the site experienced some operational problems during 2008. In 2008 the largest turnaround in Mongstad's history was executed on schedule. There were no turnarounds in 2006 or 2007.

In 2006, we received final permission to build a combined heat and power plant (CHP plant) at Mongstad.

The CHP plant is part of a strategically important project for Manufacturing & Marketing. The use of heat from the CHP plant will result in significant improvements in the Mongstad refinery's energy efficiency. The CHP plant is expected to provide approximately 280 megawatts of electric power and 350 megawatts of process heat.

However, the utilisation will be lower in the first years after the unit is expected to be put into commercial operation in 2010. The plant is under construction and will be operated by Dong Energy, with StatoilHydro paying an annual fee for its use. By the end of 2008, the progress of the total CHP investment project was 80%.

There is also an agreement with the Troll licensees that this facility will supply power to the Troll A gas platform and the associated onshore Kollsnes processing plant. In addition to the CHP plant, the CHP investment project includes a new gas pipeline from Kollsnes and necessary modifications at the refinery.

StatoilHydro is involved in several projects together with the Norwegian Government that aim to develop solutions for carbon capture and storage (CCS) at Mongstad. These projects are further described in chapter 5.3.2.1.