Through our export and marketing of gas from the Norwegian continental shelf to Europe, StatoilHydro plays a significant role in securing Europe's supplies. We currently have a market share of around 15% in the European gas market and are the second largest supplier of gas to Europe.
Gas from the Norwegian continental shelf is transported through a comprehensive pipeline network unparalleled worldwide, connecting the NCS to continental Europe and Great Britain. We have a significant (32%) interest in the NCS pipeline system owned by Gassled, which is the world's largest offshore gas pipeline transportation system, totalling approximately 7800 kilometres. This network links gas fields on the NCS with processing plants on the Norwegian mainland, as well as terminals at six landing points located in France, Germany, Belgium and the United Kingdom, providing us with flexible access to customers throughout Europe.
Beyond Norway's borders, we also provide gas to Europe from the south, in pipelines from Algeria to Spain and Portugal, and we are actively developing new supplies from the east, such as the Caspian region and the Shtokman field in north-western Russia.
A new chapter in our gas story opened in 2007 with the first shipment of liquid natural gas from our Snøhvit field in northern Norway to southern Europe. LNG's transportability is also widening our horizons as a gas supplier to countries as far-flung as the USA and Japan — giving us greater market options and greater business and strategic flexibility, as well as providing lifelines of energy far beyond the boundaries of Europe.
Record gas sales
In Europe, StatoilHydro has a strong foothold in attractive markets, with first-class market positions in countries such as Great Britain, Germany, France and Belgium. We focus mainly on meeting our existing supply commitments through long-term sales contracts, but we also attain higher value by trading additional volumes on the liquid trading points for gas in Europe.
Gas exports from the NCS were at a record level in 2008 and are expected to grow. In 2008, StatoilHydro sold 39.3 bcm entitlement gas. In addition, we sold 32.0 bcm NCS gas on behalf of the State's Direct Financial Interest (SDFI). Most of the gas was sold to European energy providers under long-term contracts. Our market share is approximately 20-25% in Germany and France and approximately 15% in the UK.
Widening our horizons
For 20 years, we have supplied the American market with oil from the North Sea and the Norwegian Sea. In February 2008 we supplied gas for the first time to the US from the Norwegian continental shelf. Cooled, liquid natural gas was shipped by tanker from the Snøhvit field in the Barents Sea and arrived at the Cove Point terminal in Maryland after a 12-day voyage from Norway.
Thanks to the transportability of LNG, liquid gas from our production from the Snøhvit facility is now reaching customers even further afield. In March 2008 we made the first ever shipment of Norwegian gas to Asia, in the form of LNG from Snøhvit. The buyer was the Tokyo Electric Power Company at the Ohgishima terminal in Tokyo Bay.
Our strategic investment in the Marcellus shale gas play through our deal with Chesapeake Energy Corporation last year will also contribute to supply stability in the American market.
We are also developing other international gas positions. Our participation in the Shtokman Development AG that aims to develop the gigantic Shtokman field on the Russian continental shelf is one example. And in Azerbaijan we have a strong position through our share in the gas and condensates field, Shah Deniz, with the phase II development set to further strengthen our position in the Caspian region.
In Algeria, StatoilHydro also has a strong gas position through our joint venture with Algeria's national oil company Sonatrach, and with BP for the gas fields In Salah and In Amenas in the Saharan desert. Together, these two fields account for a fifth of Algeria's total gas production. Algeria is the third largest gas supplier to Europe, after Russia and Norway. We are also operator of Hassi Mouina, an exploration licence in the Algerian Sahara that covers an area half the size of Denmark, where seven gas finds have already been made.
Long-term, stable supplier
The foundation for future growth in our gas business is high quality in all sections of the value chain, from discoveries and development, to market adaptation, sales and transport. StatoilHydro has long experience with building gas value chains. Now we are investing in further development of the NCS, at the same time as we are developing international positions. We intend to play a key role as a stable, long-term supplier of energy for many years to come.
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