LNS picks up multi-billion deal for project designed to reinforce Norway’s gas supplier position

Norwegian state-owned energy giant Equinor has hand-picked Leonhard Nilsen & Sønner (LNS), headquartered in Andøy in Nordland county, for work at its Snøhvit Future project, which is expected to fortify Norway’s position as a reliable long-term supplier of gas produced with very low greenhouse gas (GHG) emissions while securing jobs in the north and energy supply to Europe towards 2050.

In August 2023, the Norwegian government gave its stamp of approval, covering onshore compression from 2028 and electrification of the plant on Melkøya from 2030, for the Equinor-operated Snøhvit Future project, which comes with plans for the future operation of Snøhvit and Hammerfest LNG. The onshore gas compression is anticipated to provide sufficient flow from the reservoir to maintain high gas exports and jobs at Hammerfest LNG beyond 2030.

According to Equinor, the recently awarded Snøhvit Future construction and installation contract to LNS, worth some NOK 1.5 billion (almost $142.8 million), will generate 200 person-years of employment in the north while also generating spinoffs for Finnmark, Troms, and Nordland. Thanks to this deal, LNS will build a tunnel and landfall for the power cable that will run from Hyggevatn to Melkøya – an infrastructure allowing power from Statnett’s transformer substation at Hyggevatn to be transmitted to Hammerfest LNG on Melkøya.

Trond Bokn, Equinor’s Senior Vice President for Project Development, commented: “We are pleased to award this contract to a company in Northern Norway. LNS estimates that around 70% of the generated value will end up in Northern Norway, creating about 200 person-years (FTEs) of employment. For Equinor, it has been important that the Snøhvit Future project should create ripple effects throughout the region.”

Equinor confirms that the construction work will start once the necessary approvals/permits have been received. As the Snøhvit Future project includes onshore compression and electrification of Hammerfest LNG on Melkøya, high gas exports, jobs, and ripple effects are expected to be maintained with compression after 2030. The electrification of the plant will enable the emission cuts from the plant by 850,000 tons of CO₂ annually.

Mette H. Ottøy, Equinor’s Chief Procurement Officer, remarked: “This is LNS’s first assignment for Equinor. They submitted the best bid overall, and we look forward to working with a new supplier in the region. LNS also has a number of sub-suppliers, including Viggo Eriksen in Hammerfest, Alta Anlegg and Hörmann Norway in Tromsø.”

Equinor’s Snøhvit Future partners are Petoro, TotalEnergies, Neptune Energy, and Wintershall Dea. Three large modules will be installed at the plant: a compressor, a substation, and electric steam boilers. In addition, extensive modification work will be carried out with a lot of activity around Hammerfest, including the construction of a tunnel and transformer substation, allowing power to be transmitted from Hyggevatn to Melkøya.

Moreover, the Snøhvit Future project is estimated to generate some 1,700 person-years (FTEs) of overall employment in Northern Norway in the construction phase. Equinor awarded an engineering, procurement, construction, and installation (EPCI) contract to Aibel for Hammerfest LNG modifications in connection with the Snøhvit Future project in February 2023.

Afterward, the Norwegian giant also handed out a deal to Multiconsult to deliver detailed engineering of the grid connection for the Snøhvit Future project, which would be performed by LNS. Additionally, Nexans will supply the power cable from Rognan and Halden while Consto in Northern Norway has been picked as the supplier for construction and installation work on Melkøya. 

The Snøhvit partners are committed to ensuring that Hammerfest LNG will be competitive and viable in a low-carbon society. Hammerfest LNG provides 6.5 million households with electricity each day with the production from Melkøya accounting for 5% of Norway’s total exports.