Vannkilden ligger ved siden av vedlageret.

In Norwegian, the definite article is usually attached to the end of the noun as a suffix.

• vannkilde = water source
• vannkilden = the water source

And:

• vedlager = wood storage / firewood storage
• vedlageret = the wood storage

So instead of saying the water source, Norwegian often says the noun plus a definite ending.

Those endings show grammatical gender.

• -en is typically the definite ending for masculine/common-gender nouns
• -et is typically the definite ending for neuter nouns

Here:

• vannkilden comes from vannkilde
• vedlageret comes from vedlager

A learner may notice that kilde is often treated as feminine too, and in some contexts you may also see kilda in dialects or more feminine-friendly Bokmål usage. But kilden is completely normal in Bokmål.

Yes, ligger literally means lies, but in Norwegian it is very often used for location, especially for places, buildings, natural features, and things that are situated somewhere.

So in a sentence like this, ligger is more natural than a very literal English-style is.

Examples:

• Huset ligger ved elva. = The house is located by the river.
• Byen ligger i nord. = The city is in the north.

So ligger here means something like is located / is situated.

Ved siden av is a fixed expression meaning next to / beside.

It is made up of:

• ved = by / near
• siden = the side
• av = of

So literally it is something like by the side of, but in normal English you would translate it as next to or beside.

You should learn ved siden av as one chunk rather than trying to translate each word separately every time.

Because the two instances of ved are different words with different meanings.

1. In ved siden av, ved is a preposition meaning something like by.
2. In vedlageret, ved is a noun meaning firewood.

So:

• ved siden av = next to
• vedlageret = the wood storage / firewood storage

This is a good example of how the same written form can have completely different functions in Norwegian.

Yes. Norwegian very often forms compound nouns as a single word.

Here:

• ved = firewood
• lager = storage / stock / depot
• vedlager = firewood storage
• vedlageret = the firewood storage

English sometimes writes similar ideas as two words, but Norwegian usually joins them together. This is extremely common, so getting used to compound nouns is important.

The basic order is:

subject + verb + place phrase

So here:

• Vannkilden = subject
• ligger = verb
• ved siden av vedlageret = location phrase

That is a very normal Norwegian sentence pattern.

You can also move the location phrase to the front for emphasis:

• Ved siden av vedlageret ligger vannkilden.

That is also correct, but then the verb still stays in second position, which is an important Norwegian rule.

Norwegian often prefers a verb of position or location where English might simply use is.

Compare:

• English: The cabin is by the lake.
• Norwegian: Hytta ligger ved sjøen.

This does not mean Norwegian cannot use er. It can. But with physical location, especially for things that are fixed or situated somewhere, ligger is very common and natural.

So the sentence sounds more idiomatic with ligger than with er.

Yes.

• vann = water
• kilde = source / spring
• vannkilde = water source
• vannkilden = the water source

Just like vedlageret, this is also a compound noun. Norwegian uses these compounds all the time, so learning to spot the parts can make long words much easier to understand.

The indefinite forms are the dictionary forms:

• en vannkilde = a water source
• et vedlager = a wood storage area / a firewood store

Then the definite forms are:

• vannkilden = the water source
• vedlageret = the firewood store

A useful learning habit is to memorize nouns with their article:

• en vannkilde
• et vedlager

That helps you remember both meaning and gender.

Yes. Because both nouns are in the definite form, the sentence refers to specific things already known in the context:

• vannkilden = the water source
• vedlageret = the wood storage area

If the sentence were indefinite, it would sound more like:

• En vannkilde ligger ved siden av et vedlager.

That would mean a water source is next to a wood storage area, which sounds more general or less tied to a specific situation.

It is natural and grammatically correct. It sounds like something you might read in:

• a description of a property
• a map or site plan
• outdoor or farm instructions
• a survival or camping context

The use of ligger makes it sound especially natural for describing where something is located.