- The Snøhvit partners will invest NOK 13.2 billion (2022) in upgrading the Hammerfest LNG plant, HLNG, at Melkøya. The project involves gas onshore compression and electrification and will secure the future of HLNG.
According to the company’s website news release on December 20, 2022, at a ceremony in Hammerfest, Equinor submitted a plan for development and operation (PDO) of Snøhvit Future to the Minister of Petroleum and Energy on behalf of the Snøhvit partnership.
Onshore gas compression will provide enough flow from the reservoir to extend plateau production and maintain high gas exports from HLNG beyond 2030. Electrification will reduce CO2 emissions from HLNG by around 850,000 tonnes per year.
“Snøhvit Future will strengthen Norway’s position as a reliable and long-term supplier of LNG to Europe. Electrification will allow us to deliver this gas with close to zero greenhouse gas emissions from production. The project will secure long-term operations and gas exports from Melkøya towards 2050,” says Geir Tungesvik, Equinor’s executive vice president for Projects, Drilling & Procurement.
During normal production conditions, HLNG delivers 18.4 million standard cubic metres of gas per day, or 6.5 billion cubic metres per year. This is equivalent to the energy demand of around 6.5 million European homes, or 5% of all Norwegian gas export.
“Snøhvit Future is a comprehensive and complex project in which expertise, collaboration, and experience in the Norwegian petroleum cluster and within the partnership have brought us to an important final investment decision. The project has good socioeconomic benefits and will create strong ripple effects in the north,” continues Tungesvik.
Three large modules will be installed at the plant, which will also be subject to extensive modifications. In addition, there will be a high activity level in the Hammerfest region, such as the construction of a tunnel and a transformer station to bring electric power to Melkøya.
Higher demand for power to HLNG will trigger Statnett’s construction of a 420 kV power line from Skaidi to Hyggevatn and the Snøhvit partners will provide a considerable investment contribution. The new line will strengthen the power infrastructure by providing higher grid capacity to Hammerfest, paving the way for new industrial developments in the area.
Electrification – an important contribution to reaching Norway’s climate goal
“We are converting to electric operation at Melkøya, thereby reducing annual emissions of CO2 by around 850,000 tonnes. This is one of the largest individual emission reduction measures for decarbonization of oil and gas production in Norway. The project is a key contributor to the energy transition,” says Grete B. Haaland, senior vice president for Exploration and production north.
Electrification entails replacing the current gas turbine generators with power from shore. This will cut emissions equivalent to 13 per cent of the oil and gas industry’s overall 55 per cent emissions reduction by 2030. The project’s emissions reductions correspond to two per cent of Norway’s annual emissions.
Major local and regional ripple effects
The development will generate considerable ripple effects in terms of employment as well as local and regional service deliveries. Around 70 per cent of the value creation in the development phase is expected to come from Norwegian companies. More than a third of this will go to Northern Norway.
“The Snøhvit Future project underlines our commitment to the North. It is crucial to secure operation and maintain existing jobs on Melkøya. In the development phase we estimate additional regional employment of around 1680 full-time equivalents. We are focusing on meeting the ambitions of North Norwegian content in the contracts to be awarded in the project phase towards operation start in 2028,” continues Haaland.
HLNG has generated significant socioeconomic benefits in the city of Hammerfest, the county of Finnmark, and the trade and industry in North Norway since its initial development in the 2000s. The plant is a cornerstone in the region, with around 350 employees as well as around 150 contractors and apprentices. There are indirect socioeconomic benefits in addition to this.
As a result of the development, the operations phase is expected to be extended by 10 years while maintaining current levels of employment.
Snøhvit Future
- The licence owners of Snøhvit are: Equinor Energy ASA (36.79%), Petoro AS (30.00%), TotalEnergies EP Norge AS (18.40%), Neptune Energy Norge AS (12.00%) and Wintershall Dea Norge AS (2.81%).
- The Snøhvit field lies in the central part of the Hammerfest basin in the southern part of the Barents Sea. The water depth is 310 – 340 metres. Snøhvit was proven in 1984, and the original plan for development and operation (PDO) was approved in 2002.
- Snøhvit was the first field to be developed in the Barents Sea. The field comprises the Snøhvit, Albatross and Askeladd structures.
- Snøhvit Future Project consists of two developments: Snøhvit Onshore Compression and Snøhvit Electrification.
- The development covers: 1) the onshore compressor, transformer station and electric steam boilers on Melkøya, 2) the grid connection including a transforming station at Hyggevatn, and 3) the development of new power capacity from Skaidi to Hammerfest.
- Onshore compression will help maintain sufficient inlet pressure for the LNG plant as the reservoir pressure drops. It will also reduce the risk of accumulation of fluid liquids in the long multiphase pipeline from field to shore. This will give a longer operational window and extend plateau production.
- Electrification of Melkøya will minimise emissions from LNG production, leading to an annual emission reduction of close to 850,000 tonnes of CO2, equivalent to the emissions from 450,000 fossil-fuelled (ICE) cars.
- It will reduce the carbon footprint from LNG production at Melkøya from 3.8 to 0.6 g CO2e/MJ.
- Emissions reductions from HLNG meet the requirements stated in the authorities’ approval of the plan for development and operation of Snøhvit from 2002.
- Onshore compression and conversion to electrical operation of HLNG are scheduled to start in 2028.
Hammerfest LNG
- Hammerfest LNG is Europe’s first large-scale liquefied natural gas (LNG) plant and is located on the island of Melkøya outside Hammerfest.
- Coming on stream in 2007, the plant is a cornerstone in the Finnmark region, employing around 500 people, including apprentices and contractors.
- The plant contributes strongly to value creation and activity through the use of local suppliers and purchase of services. In 2021, work equivalent to 2171 full-time positions was carried out (turnover: NOK 5 540 million) in the northernmost counties, of which 1401 full-time equivalents (turnover NOK 3 649 million) were in the Hammerfest region.
- HLNG produces 4.65 million tonnes of LNG, 0.34 million tonnes of LPG and 0.73 million tonnes of condensate per year. (LNG = liquefied natural gas, LPG = liquefied petroleum gas).
- Hammerfest LNG produces around 6.5 billion cubic metres per year at normal production, equivalent to the annual gas demand of 6.5 million European homes.
- Recovery and transport to shore are carried out from the Snøhvit, Albatross and Askeladd fields. The gas arrives at the plant via a 143 km pipeline. At the plant, the natural gas is processed and cooled to minus 163 degrees, after which it is stored in dedicated tanks before shipment. All products (LNG, LPG, and condensates) are exported by vessels or vehicles.
About the development solution
- The development project will involve major constructions on the island of Melkøya and on the mainland.
- Three modules will be constructed: a module for a feed gas compressor, a module for electrical steam boilers and a transformer station.
- High voltage cables will connect Melkøya to Hyggevatn substation and the national grid. A tunnel will be constructed to bring the cables from Hyggevatn to Meland. Between Melkøya and Meland, subsea cables will be installed.
- The grid capacity to Hammerfest will increase thanks to the new grid reinforcement planned by Statnett between Hyggevatn and Skaidi.
- For 15 years, one of the world’s most energy-efficient LNG plants has delivered liquefied natural gas to customers all over the world. 350 permanent employees ensure stable and safe operations, and Bodø Science Park has proven that the actual ripple effects in North Norway are around 2,000 full-time equivalents.
- The project will secure important jobs for decades to come, representing a continuation of this major industrial adventure, both in the project phase and the operations phase.
