- Equinor has, on behalf of the Snøhvit partnership, awarded Aibel a major contract for Hammerfest LNG modifications in connection with the Snøhvit Future project. The contract is subject to governmental approval of the project.
According to the company’s website news release on February 14, 2023, Aibel has been awarded an EPCI contract that involves engineering, procurement, construction and installation of two new processing modules related to the onshore compression and electrification of the Melkøya plant. They will also build a new receiving station for power from shore and carry out integration work at the plant.
The contract is an option in the FEED contract (front-end engineering and design) awarded to Aibel in September 2020.
"Aibel has been one of our main suppliers for Hammerfest LNG since the start-up in 2007. They know the plant well, have set up a local department in Hammerfest, and have solid experience from other major modification projects on plants while on stream. I therefore have high expectations of them doing a good job safely. This contract will have major ripple effects locally, regionally and nationally," says Mette H. Ottøy, Equinor's chief procurement officer.
Aibel will also carry out further upgrades of existing systems at Hammerfest LNG to make the plant more resilient for extended life until 2050.
This year and next, Aibel will award several major contracts to its subcontractors for work at the plant and will facilitate the use of local suppliers in several phases of the project, including construction. The engineering/design work starts immediately.
Aibel will carry out large, complex modifications at Hammerfest LNG. They will also build larger modules at their yards and most of the work will be carried out in the period of 2024-2026.
The largest project at Melkøya since the plant came on stream Snøhvit Future will create significant ripple effects. It is expected that about 70 percent of the value creation will go to Norwegian companies, and more than a third of this to Northern Norway. Regional employment during the project period is estimated at 1 680 person-years (5 400 person-years nationally).
The Snøhvit Future project consists of online compression and electrification of Hammerfest LNG at Melkøya. As the pressure drops in the reservoirs, compression is required to ensure sufficient flow of the gas to the plant. The project will extend plateau production and ensure high gas exports, jobs and ripple effects also after 2030, while reducing CO2 emissions from the plant by 850,000 tonnes annually, corresponding to 2 per cent of Norway’s total emissions. The Norwegian parliament has decided to reduce Norwegian emissions by 55 per cent by 2030.
NOK 13.2 billion will be invested in the Snøhvit Future project, ensuring continued operation of the plant towards 2050.
Facts
When a partnership asks permission to award contracts prior to regulatory approval of a project, it may be for several reasons, such as long delivery times for equipment or extensive engineering. To be able to deliver the project on time it may be necessary to award contracts early.
The partners are solely responsible for the financial risk. Such pre-investments are approved by the Ministry of Petroleum and Energy. The approval of pre-investments will not guide (or affect) the authority's processing of the partnership’s application for project approval.
Snøhvit Future
- The licensees in Snøhvit Future are Equinor Energy ASA (36.79%), Petoro AS (30.00%), TotalEnergies EP Norge AS (18.40%), Neptune Energy Norge AS (12.00%) og Wintershall Dea Norge AS (2.81%).
- The Snøhvit field is located in the central part of the Hammerfest Basin in the southern Barents Sea. The water depth is 310-340 metres. Snøhvit was discovered in 1984, and the original plan for development and operation (PDO) was approved in 2002.
- Snøhvit is the first field to be developed in the Barents Sea. The field includes the Snøhvit, Albatross and Askeladd structures.
- The development includes a compressor, transformer station and electric steam boilers at Melkøya, grid connection including a transformer station at Hyggevatn, and Statnett's construction of new power capacity to Hammerfest from Skaidi.
- Onshore compression and conversion to electric operation of Melkøya are scheduled to start in 2028.
Hammerfest LNG
- Hammerfest LNG, Europe's first liquified natural gas (LNG) plant, is located at Melkøya outside Hammerfest.
- Online in 2007 Hammerfest LNG is a cornerstone company in Finnmark with about 350 permanent employees plus about 150 contractors and apprentices. Including spin-offs, the operation of the plant adds almost 900 man-years of employment in Northern Norway
- During normal production, HLNG delivers 18.4 million standard cubic metres of gas per day, or 6.5 billion cubic metres per year. This corresponds to the energy needs of around 6.5 million European households, or 5% of all Norwegian gas exports.
- Production and landing take place from the Snøhvit, Albatross and Askeladd fields. The gas enters the plant through a 143-kilometre pipeline. At the plant, the natural gas is processed and cooled down to minus 163 degrees and stored in dedicated tanks before shipping. All products (LNG, LPG and condensate) are exported in tankers or trucks.
