Alvheim Crude Oil: The History, Production, Transport, and Price of Norwegian Blend
Alvheim blend is a Norwegian blend of heavy crude oils from the North Sea produced by Statoil. It has an API gravity of between 30 and 32 degrees. The crude oil used in the Alvheim blend varies slightly from field to field, with high-quality sour crudes being more valued.
Alvheim blend is excellent for diluting and blending heavy crudes with lighter ones. And can also be used to produce heavy naphtha. Because of its high content of asphaltic materials, it is often blended with light oils like Brent Blend or Galko Blend to produce asphalt.
Alvheim crude can be blended with other light oils to make MGO, an important chemical intermediate for polymers and synthetic lubricants. In addition to its size and scope, Alvheim Blend is also unique because it produces both heavy crude oil and light condensate.
Condensate is a light oil with low viscosity and high density that can be used as a transportation fuel or to produce gasoline and diesel.
Alvheim is the result of the production of the two Norwegian fields, Alva and Heimild.
The fields are in the North Sea, approximately 150 kilometers from Stavanger.
Norway considered it remarkable to have discovered these oil fields at such depths and with such tremendous pressure. However, the cost of production was high, and it took almost 20 years to produce the crude oil.
The following article provides an overview of the history, production process, transport, and price of the Alvheim blend.
The History of the Alvheim Blend
The Alva and Heimild fields were discovered in the North Sea in the mid-1980s. Still, it wasn’t until a decade after the Norwegian government approved the construction of a new pipeline connecting the fields to the Sture terminal where a new platform also had to be built.
The crude from the two fields has the same properties and was blended before being transported through the pipeline. The blended crude oil is called Alvheim.
In 2001, the crude was transported from the Sture terminal to the Port of Rotterdam by tanker.
The fields of Alvheim Blend were discovered in the late 70s and early 80s. The first commercial production started in 1990, and the fields produced about 35 million tons of oil equivalent (1.8 billion barrels). In addition, there are roughly 120 million barrels of oil in place. This high volume makes the Alvheim Blend one of Norway’s most productive oil fields.
The Production Process
The Alva and Heimild fields are located in Utsir High, south of the Gullfaks field.
The Alva and Heimild fields are subsea producers tied to the Gullfaks C platform, which produces and processes water and natural gas. The crude oil is mixed with water and natural gas to form a transportable mixture that is easier to send through a 10-inch subsea pipeline to the Gullfaks C platform.
The crude oil then heads to the Sture terminal, where it is blended with Heimdal and Sola’s crudes. After this, it is ready to be shipped from the Sture terminal to the Port of Rotterdam for storage in tanks, ready for international trade, or sent to refineries.
ConocoPhillips, Lundin Energy, and Aker BP operate these Norwegian fields of Alvheim Blend. Aker BP is considered the largest company in terms of production in Europe.
Since several companies operate the fields, it’s difficult to say which company has owned the majority stake. However, ConocoPhillips and Aker BP have been working together on many projects since 1999, so it’s apparent that they own the most significant portion between them.
Transport of Alvheim Blend
The crude from the three fields is transported in the same tanker when it leaves the Sture terminal. First, the tanker travels through the Great Belt, which connects Zealand with Funen, and then through the East Bridge connecting Funen with Jutland. Next, the tanker travels through the Little Belt and arrives at the Port of Rotterdam.
The distance between the Port of Sture and the Port of Rotterdam is approximately 1,200 nautical miles. The voyage from Sture to Rotterdam takes about 20 days. The distance from Rotterdam to the Atlantic Ocean is shorter than from Sture, but the tanker still has to pass the sandbanks in the Waddenzee.
This journey takes approximately 12 days, and the entire trip from Sture to the Atlantic Ocean takes about 32 days.
Alvheim Crude Oil Price
Alvheim crude oil price is assessed on a CIF Rotterdam basis. Spreads like the Alvheim vs North Sea CIF Dated Brent Strip are also published.
The Alvheim blend is a crude oil produced from the fields in the North Sea. The crude oil is first produced from the fields of Alva and Heimdal. Then blended and transported through a pipeline to the Sture terminal, where it is shipped to the Port of Rotterdam for storage.