Equinor awards Aibel contract for major modifications to Hammerfest LNG plant

The Hammerfest LNG plant.
(Photo: Øivind Haug / Equinor)

(IN BRIEF) Norwegian energy company, Equinor, has awarded a major contract to Aibel on behalf of the Snøhvit partnership for modifications to the Hammerfest LNG plant as part of the Snøhvit Future project. The project involves engineering, procurement, construction, and installation of two new processing modules for onshore compression and electrification of the Melkøya plant, as well as upgrades to existing systems at the plant to ensure its extended life until 2050. Aibel’s contract also includes the construction of a new receiving station for power from shore and integration work at the plant. The Snøhvit Future project aims to extend plateau production and reduce CO2 emissions from the plant by 850,000 tonnes annually, corresponding to 2% of Norway’s total emissions. The contract is subject to government approval of the project, and the work will take place mainly from 2024 to 2026.

(PRESS RELEASE) STAVANGER, 14-Feb-2023 — /EuropaWire/ —  Equinor ASA (OSE:EQNR, NYSE:EQNR), an oil, gas, wind and solar energy company active in more than 30 markets globally, on behalf of the Snøhvit partnership, has awarded Aibel a major contract for modifications at the Hammerfest LNG plant in connection with the Snøhvit Future project. The contract, subject to government approval of the project, involves engineering, procurement, construction, and installation of two processing modules for the onshore compression and electrification of the Melkøya plant, as well as the construction of a new receiving station for power from shore and integration work at the plant.

Aibel’s contract is an option in the FEED contract awarded in September 2020, and it also includes upgrades to existing systems to extend the plant’s life until 2050. Aibel will carry out large, complex modifications at Hammerfest LNG and build larger modules at their yards, with most of the work taking place from 2024 to 2026.

The Snøhvit Future project aims to extend plateau production and ensure high gas exports while reducing CO2 emissions from the plant by 850,000 tonnes annually, corresponding to 2% of Norway’s total emissions. It involves online compression and electrification of Hammerfest LNG at Melkøya to ensure sufficient flow of gas to the plant. The Norwegian parliament has set a target of reducing national emissions by 55% by 2030, and this project supports that goal.

The contract, which involves significant investment of NOK 13.2 billion, is expected to create significant ripple effects, with 70% of the value creation going to Norwegian companies and more than a third of that to Northern Norway. The project is estimated to create 1,680 person-years of regional employment during the project period and 5,400 person-years nationally.

Aibel will award several major contracts to its subcontractors for work at the plant this year and next and facilitate the use of local suppliers in several phases of the project, including construction. The engineering and design work has already started. This project represents the largest at Melkøya since the plant’s inception, and it is expected to ensure the continued operation of the plant towards 2050.

Partnerships may request permission to award contracts before receiving regulatory approval for their project due to reasons such as long equipment delivery times or extensive engineering. Such pre-investments are approved by the Ministry of Petroleum and Energy and are the sole responsibility of the partners who bear the financial risk. The approval of pre-investments has no bearing on the regulatory processing of the partnership’s application for project approval. This measure may be necessary to ensure timely delivery of the project.

“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.

Digital contract signing by Mette Halvorsen Ottøy (left), Equinor’s chief procurement officer, and Mads Andersen, CEO of Aibel. To the right: Siv Skadsem, Equinor’s vice president for new assets on the Norwegian continental shelf (NCS).
(Photo: Eva Sleire / Equinor)