Statoil awards FEED contracts for Johan Sverdrup Phase 2

The Johan Sverdrup partnership has now decided to proceed with (DG2) Phase 2 of the Johan Sverdrup development off Norway, awarding FEED contracts to Aker Solutions, Kværner and Siemens.

Statoil is the operator of the project with 40.0267 percent and the remaining partners are Lundin Norway with 22.6 percent working interest, Maersk Oil with 8.44 percent, Petoro with 17.36 percent and Aker BP with 11.5733 percent working interest.

Statoil informed on Tuesday that the Phase 1 of Johan Sverdrup is under development, with first oil scheduled for late 2019.

The partners will now proceed with maturing Phase 2 for the investment decision and submission of the plan for development and operation (PDO) in the second half of 2018. Phase 2 is scheduled to come on stream in 2022, Statoil said.

“We must take a generational perspective on the Johan Sverdrup development. Working closely with partners and government authorities we now have a plan for Phase 2 that maximizes value for society, industry and the licensees,” says Statoil’s project director for Johan Sverdrup, Kjetel Digre.

“The Johan Sverdrup suppliers have demonstrated a willingness and capabilities to develop good solutions in a partnership with us. The contributions have been key to the improvements we have achieved so far. We are pleased to see that this trend is being progressed in the awarded FEED contracts. And we see that Norwegian suppliers are competitive in an international market,” says Digre.

Statoil has implemented several improvement programs for phase 2 in the Johan Sverdrup development. Capital expenditures for Phase 2 are now estimated at between NOK 40 – 55 billion (NOK billion nominal, fixed currency and excluding IOR), halving the estimate since the PDO was submitted for Phase 1 of Johan Sverdrup.

“The quality of phase 1 and the improvement work we have performed with our partners and suppliers  for phase 2 has enhanced profitability. The break-even price for the full-field development is now less than USD 25 per barrel and with an ambition of a world class recovery rate of 70 %,” says Digre.

Development concept

The partnership has also decided on the development concept for Johan Sverdrup. Phase 1 of the development establishes a field center consisting of four platforms on the field. Phase 2 builds on this infrastructure, adding another processing platform to the field center. Overall this will result in a processing capacity of 660 000 barrels of oil per day.

The following FEED contracts will be awarded in connection with the decision to proceed with the development that has now been made: Processing platform to Aker Solutions; jacket to Kværner; and power supply from shore to Siemens.

The FEED work awarded to Aker Solutions is for a new processing platform and the bridge that will connect it to the development’s riser platform. The contract, valued at about NOK 300 million, also includes the design of a module and the work to integrate this with the riser platform.

Objective of Kvaerner’s FEED study is to develop and mature the concept for the Process Platform 2 steel substructure – P2 jacket in order to develop technical documentation to a level appropriate for start-up of detailed design or EPC contract, as well as establishing necessary interface to other parts of the Johan Sverdrup Phase 2, and establish the basis for a safe execution with minimal growth and changes during the project phase.

Phase 2 also includes the development of the Avaldsnes (east), Kvitsøy (south) and Geitungen (north) satellite areas to be phased in for processing and export on the field center.

Statoil also stated that 28 new wells are planned to be drilled in connection with the Phase 2 development.

The Phase 2 concept also includes the establishment of an area-wide solution for power from shore for the Utsira High by 2022.

Maturing and planning Phase 2 parallel with the development of Phase 1 will ensure a consistent full-field solution and cost-efficient hook-up when Phase 1 is on stream. The field life is estimated at 50 years.