Equinor setting the scene for Northern Lights project with ‘first big contract’

Norwegian energy giant Equinor is pushing forward with the development of the Northern Lights, a carbon capture and storage project in Norway, in partnership with two other oil majors, Shell and Total. The latest step was the award of a contract for the preparation of onshore facilities for the project.

In connection with the Northern Lights project, Equinor said on Tuesday it has signed a contract with Skanska for building site preparation and the construction of jetty facilities for the CO2 receiving terminal.  

Equinor will also sign a lease agreement with CCB Kollsnes for the area for the temporary project office.

Project director, Sverre Overå, said: “Today we move parts of the Northern Lights project to Kollsnes, allowing the necessary preparations for the development of the receiving terminal to start pending the possible approval of the Langskip project by the Norwegian government in the course of the year.

“A total of 10-15 people from Equinor’s Northern Lights project team and the suppliers will work in the project office”.

Equinor said that the contract is subject to final government approval of the Langskip project. The agreements aim to ensure progress as planned for the Northern Lights onshore facilities in the event of project approval.

To remind, the Northern Lights is part of the Norwegian full-scale carbon capture and storage project called Longship or Langskip in Norwegian. The project has been described as “the greatest climate project in Norwegian industry ever”.

Equinor also said on Tuesday that the CO2 receiving terminal will be located at the premises of Naturgassparken industrial area in the municipality of Øygarden in Western Norway. The plant will be remotely operated from Equinor’s facilities at the Sture terminal in Øygarden.

The plant is designed to store 1.5 million tonnes of CO₂ per year, consisting of storage tanks for intermediate storage, an import quay, unloading equipment, injection pumps and equipment, in addition to administration buildings.

Worth about NOK 380 million ($40.9M), the contract with Skanska includes the establishment of a site, road and infrastructure for the terminal and the construction of an administration building, in addition to warehouse and workshop buildings.

The contract also includes the construction of a jetty and the establishment of an exit road to Naturgassparken from country road 561.

“We are pleased to award the first big contract in the project. Skanska is a solid national and regional player that we have worked successfully with before. This contract demonstrates that the Northern Lights development will contribute with activity and new opportunities for regional and local industry”, says Peggy Krantz-Underland, Equinor’s chief procurement officer.

The work will mainly be headed by Skanska’s Bergen department. Skanska estimates that the project will involve between 100 – 150 man-years of work for Skanska and the partners.

Preparations will start after the contract signing. The preparation of the building site is scheduled to start in January 2021, subject to final government approval of the Langskip project.

Equinor will also sign a contract with CCB Kollsnes for the hire of office trailers and storage areas totalling about 16,000 m².

The lease agreement will run until the summer of 2024 when the terminal and administration building have been completed.

Earlier this year Equinor, Shell and Total decided to invest in the Northern Lights project, the initial investments totalling almost NOK 6.9 billion.

Norwegian employment effects in the development phase of Northern Lights are estimated at more than 2,100 man-years. Regionally, the employment effect in the development phase totals more than 250 man-years.

In related news, Equinor on Monday said that the partners in the Northern Lights project had decided to disclose datasets from the 31/5-7 Eos confirmation well drilled and completed in the North Sea earlier this year.

The released data discloses relevant subsurface data including well log data, core data, and well test data. They can be used by interested parties for evaluation and research for the benefit of the emerging CCS business.