Equinor awards $790 million contract to Aibel

Hammerfest LNG (HLNG) is Norway’s and Europe’s first large-scale liquified natural gas (LNG) plant. (Photo: Harald Petersen / Equinor.)

Equinor has awarded Aibel a $790 million contract for the engineering, procurement construction and installation of two processing modules to boost onshore compression and electrification of the Melkøya plant.

The contract stems from an option in a separate front-end engineering and design (FEED) contract that Equinor awarded to Aibel in September 2020. The latest contract, worth NOK 8 billion, is subject to governmental approval of the project, Equinor said.

Aibel 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. The work includes 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 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, Equinor said.

NOK 13.2 billion will be invested in the Snøhvit Future project, ensuring continued operation of the plant towards 2050, Equinor said.

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 is Europe’s first liquified natural gas (LNG) plant, is located at Melkøya outside Hammerfest.

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.

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%).