Kvaerner, KBR beat competition to Johan Sverdrup contract

Statoil is, on behalf of the Johan Sverdrup partnership, signing a contract with a joint venture consisting of Kvaerner and KBR for construction of the topside for the utility and living quarter platform. The contract has a value of NOK 6.7 billion ($843 million).

The contract includes engineering, procurement and construction (EPC) of the topside for the Johan Sverdrup utility and living quarter platform in the Norwegian part of the North Sea.

“The market has shown a strong interest in this contract, and Kvaerner and KBR have won the contract in tough international competition,” says Margareth Øvrum, executive vice president for Technology, Projects and Drilling in Statoil.

The utility and living quarter platform consists of two modules, one utility module and one accommodation module. Fabrication of the utility module will be done by subcontractors in Poland under management of Kvaerner and completed at Stord Norway.

KBR will carry out engineering and procurement of equipment for the utility module. The accommodation module will be constructed at Apply Leirvik’s yard in Stord Norway and in Emtunga Sweden. The topside modules will be assembled at Kvaerner Stord.

 

CEO: Today’s agreement shows that also Kvaerner’s business for platform topsides has established a new competitive cost level.

 

 

The topside will have a total weight of around 19,000 tonnes, the utility module accounting for 9,700 tonnes and the accommodation module 9,300 tonnes.

The Contract also includes an option for commissioning assistance and offshore hook-up for the platform

“So far the Norwegian supplier industry has won the main Johan Sverdrup contracts. It is good to see that Statoil and the suppliers jointly are about to break the cost curve to ensure competitive force in a tough time for the whole industry,” says Øvrum.

Jan Arve Haugan, President & CEO in Kvaerner said: “This is another milestone in the industry’s ongoing improvements. The success of this process is based on close cooperation with our customers. Last year, the turn-around of Kvaerner’s business for steel substructures for platforms resulted in a letter of intent for two jacket deliveries to Johan Sverdrup.

“Today’s agreement shows that also Kvaerner’s business for platform topsides has established a new competitive cost level. This strengthens our position for also winning other projects. We will continue the drive to improve our costs, productivity and competitiveness even further, in close dialogue with Statoil and other clients,” he added.

Pioneering Spirit for the job

The utility and living quarter platform will be completed in the first quarter in 2019 for installation at the Johan Sverdrup field by use of the world’s largest heavy-lift vessel Pioneering Spirit.

The platform will accommodate personnel working at the Johan Sverdrup field for more than 50 years. It will constitute the largest living quarters on the Norwegian continental shelf (NCS) with a bed capacity for 560 people.

In addition to accommodation, all field production control and monitoring activities will be carried out in the control room on the utility and living quarter platform. The platform will also contain central support systems for the field centre, such as emergency power, firewater systems, diesel, heat recovery and freshwater production.

Gangway connection

The utility and living quarter platform will be connected to the processing platform at the Johan Sverdrup field centre by a gangway.

“The Johan Sverdrup project is one of the largest industrial projects in several decades in Statoil and on the NCS,” says Øivind Reinertsen, senior vice president for the Johan Sverdrup field.

“On plateau, production will account for 25% of all Norwegian oil and gas production. We have now awarded the project’s second main topside construction contract, and we are on schedule to meet an ambitious field development plan with production start on Johan Sverdrup at the end of 2019.”

The investment costs in the first phase of the Johan Sverdrup development are estimated at around NOK 117 billion (2015 value), with expected recoverable resources in the range of 1.4 – 2.4 billion barrels of oil equivalent.

The first phase of the Johan Sverdrup field development will consist of four installations, including a utility and living quarter platform, a processing platform, a drilling platform and a riser platform, as well as three subsea water injection templates. The platforms will be interlinked by gangways.

The ambition is a recovery rate of 70% for Johan Sverdrup. The Johan Sverdrup licensees are Statoil, Lundin Norway, Petoro, Det norske oljeselskap and Maersk Oil. The partners have recommended Statoil as operator for all field phases.

This contract award is subject to approval of the plan for development and operation of the Johan Sverdrup field by the Norwegian parliament (Storting) in 2015.

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