September 2, 2020
Norwegian oil and gas company Equinor has awarded its compatriot Aibel a front-end engineering and design contract (FEED) for modification of the Hammerfest LNG plant in connection with the Snøhvit Future project.
Snøhvit is the first development in the Barents Sea, and the first major development on the Norwegian continental shelf with no surface installations. Gas from the field is brought onshore and cooled down at the Hammerfest LNG plant.
The FEED work will cover two sub-projects under the Snøhvit Future development. The first sub-project involves the construction of an onshore compression station at the Hammerfest LNG plant.
As the pressure in the wells on the offshore Snøhvit field in the Barents Sea decreases, there will be a need for pressure support to maintain plateau production at the plant. The onshore compression station would be expected to contribute to an increase in the recovery factor from the Snøhvit field. Equinor and partners plan a concept select decision for the compression scope during autumn 2020.
The second sub-project is related to investigating the electrification of the Hammerfest LNG plant to minimize the Snøhvit field’s carbon footprint.
By replacing current gas turbines with power from shore, it may be possible to reduce CO2 emissions to near zero. Equinor and partners plan a concept select decision for the electrification scope in the end of 2020, Equinor said.
The FEED contract has an estimated value of NOK 140 million (around $16 million) for Aibel, however, the contract includes an option for each of the sub-projects for an execution phase including engineering, procurement, construction, and installation (EPCI) for compression and electrification. The value of the options is of “major size”, which, for Aibel means higher than NOK 2.5 billion ($285 million)
The project will be managed from Aibel’s office in Asker, and around 80 employees will participate in the FEED phase. Start-up takes place immediately, with the scheduled delivery of the FEED in April 2021.
Equinor and partners are working towards two final investment decisions (FIDs) for the sub-projects in the second half of 2021.