Ormen Lange group awards Aker Kværner FEED contract for processing plant

By OGJ editors

HOUSTON, Mar. 19 -- Norsk Hydro ASA, development operator for Ormen Lange field in the Norwegian Sea, has selected Aker Kværner, Lysaker, Norway, to receive a contract worth 950 million kroner for engineering and design of the project's onshore Nyhamna processing plant near Aukra, in Møre og Romsdal County, Norway.

The contract is for front-end engineering design, engineering, procurement, and construction management assistance. The work will enable the consortium to establish an investment-decision cost estimate before submitting a formal plan for development and operation (PDO).

The Nyhamna development, due for completion when Ormen Lange field comes on stream in 2007, includes the process plant, utility systems, slug catchers, a tank farm, and power supply and distribution. EPC contracts for these other installations will be awarded during 2003-05, Norsk Hydro said.

Pipeline plans
The Ormen Lange project also will require one of the most extensive subsea gas export pipeline on the Norwegian continental shelf, a two-part pipeline with a combined length of 1,200 km from the onshore processing plant to the UK via Sleipner field.

The Ormen Lange licensees chose the route Dec. 18 (OGJ Online, Dec. 23, 2002) for the export pipeline—from the processing plant at Aukra to the Sleipner installation in the North Sea, and from Sleipner to Easington/Dimlington, UK—and gave approval in February to proceed with pipeline construction.

Norsk Hydro plans in June to submit to Norwegian authorities a plan for the installation and operation (PIO) of the most southerly stretch of the pipeline system—between Sleipner and Easington/Dimlington in the southeastern UK.

A corresponding PIO for the northerly section, between Sleipner and the Nyhmna plant, is scheduled for delivery to authorities by October, together with the PDO for deepwater Ormen Lange field itself, which lies 140 km west of Kristiansund, Norway in 1,000 m of water.

Ormen Lange needs pipeline capacity of at least 60 million standard cu m/day. In addition, there is transport capacity demand in other parts of the system for gas from other fields.

"The total export pipeline system tied into Ormen Lange will be the most significant pipeline project ever in the Norwegian offshore sector," a consortium spokesperson said.

The total Ormen Lange investment, including field development and transportation pipelines, is estimated to be 55 billion kroner (2002). The field is the first deepwater development project on the Norwegian Continental Shelf.

"The investment demands large parts of the world's pipeline-laying capacity in 2005 and 2006," says Bengt Lie Hansen, Hydro's head of mid-Norway exploration and development. "Ormen Lange will increase Norwegian gas export(s) by 25%, making Norway the world's next largest gas exporter after Russia," he said.

First production from Ormen Lange is planned for October 2007, with gas production scheduled to continue for 30-40 years. AS Norske Shell is the production phase operator. The field's production is expected to peak at 20 billion standard cu m/year of natural gas, about 20% of the total anticipated Norwegian gas production in 2010, Norsk Hydro said.

The estimated gas reserves on Ormen Lange are 375 billion standard cu m of dry gas and 22 million standard cu m of condensate, making it the largest undeveloped gas field on the shelf.

Developer Norsk Hydro holds a 17.956% interest share in the field and Norske Shell 17.2%. Other shareholders are Petoro AS 36%, Statoil ASA 10.774%, Esso Norge AS 7.182%, and BP PLC 10.888%.

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