Equinor awards EPCI Hammerfest LNG contract to Aibel

February 14, 2023, by Aida Čučuk

Norway’s energy company Equinor has granted compatriot energy services company Aibel an engineering, procurement, construction, and installation (EPCI) contract for Hammerfest LNG modifications in connection with the Snøhvit Future project.

The contract, awarded on behalf of the Snøhvit partnership, is subject to governmental approval of the project.

It involves the engineering, procurement, construction, and installation of two new processing modules related to the onshore compression and electrification of the Melkøya plant, with Aibel expected to build a new receiving station for power from shore and carry out integration work at the plant.

Under the contract, 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 new contract is an option in the front-end engineering and design (FEED) contract 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,” said Mette H. Ottøy, Equinor’s Chief Procurement Officer.

According to Equinor, this year and next, Aibel will award several major contracts to its subcontractors for work at the plant and will facilitate the use of local suppliers in several phases of the project, including construction. The engineering/design work starts immediately.

Equinor said Aibel will carry out large, complex modifications at Hammerfest LNG. and will build larger modules at their yards. Most of the work will be carried out in the period of 2024-2026.

It is expected that about 70% of the project’s value creation will go to Norwegian companies, and more than a third of this to Northern Norway.

The Snøhvit Future project consists of online compression and electrification of Hammerfest LNG at Melkøya.

The project is expected to 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% of Norway’s total emissions. To note, the Norwegian parliament plans to reduce the countries’ emissions by 55% by 2030.

According to Equinor, NOK 13.2 billion (around $1.3 billion) will be invested in the Snøhvit Future project, ensuring continued operation of the plant towards 2050.

The license 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 is located in the central part of the Hammerfest Basin in the southern Barents Sea. The water depth is 310-340 metres.

According to Equinor, Hammerfest LNG, located at Melkøya outside Hammerfest, during normal production, delivers 18.4 million standard cubic metres of gas per day or 6.5 billion cubic metres per year. This corresponds to the energy needs of around 6.5 million European households or 5% of all Norwegian gas exports.