Arctic town booms on oil and gas hopes

House prices in one of the world’s most northerly towns are rocketing thanks to hopes for an Arctic oil and gas boom, and the local council can finally afford a fence to keep out reindeer.

“A new era is coming,” Alf Jakobsen, mayor of the Norwegian port of Hammerfest, said in his office where the town’s polar bear crest hangs on a wall.

High oil prices, new technology to offset freezing conditions and prospects that global warming may melt polar ice are making once inaccessible reserves in the polar region suddenly attractive to oil and gas firms.

At the heart of Hammerfest’s optimism is the Snoehvit natural gas field, 140 km (90 miles) offshore, and a gas processing plant being built by Norwegian energy group Statoil (STL.OL: Quote, Profile, Research) on nearby Melkoya island at a cost of $9.6 billion.

Snoehvit will be the world’s most northerly plant for liquefied natural gas — gas super-cooled for transport by ship

“People are more optimistic,” said Sigrid Viken, a 44-year-old librarian who said Snoehvit would help fill a gap left after a fish processing plant closed in the 1990s. “The environment is being damaged but we’re getting lots of money.”

Reuters