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Royal Dutch Shell CEO Ben van Beurden (Image courtesy of Shell)

Shell announced it will drop one of Norway’s biggest and most innovative industrial projects, Ormen Lange, due to rising costs.

Shell said on Friday it would postpone a project to provide subsea compression in the North Sea field.

Ormen Lange is Norway’s second largest gas field.

The decision will not be re-evaluated for several years, Shell said.

Odin Estensen, chairman of the Ormen Lange Management Committee said, “The oil and gas industry has a cost challenge. This, in combination with the maturity and complexity of the concepts and the production volume uncertainty, makes the project no longer economically feasible.”