Equinor ASA mentioned Monday the Snøhvit Future undertaking is now anticipated to value NOK 5.3 billion ($526.05 million) greater than the unique funding estimate three years in the past and that the undertaking would take longer to finish.
Snøhvit Future, authorized by Norwegian authorities 2023, consists of onshore compression to make sure the circulation of fuel from the Snøhvit subject on Norway’s aspect of the Barents Sea and electrification on the linked Hammerfest LNG on the Norwegian island of Melkøya to curb emissions. Equinor expects electrification to chop the liquefaction plant’s carbon dioxide emissions by 850,000 tonnes a 12 months, equal to 2 % of Norway’s annual emissions.
The Norwegian majority state-owned firm beforehand set 2028 and 2030 as completion dates for the onshore compression and electrification respectively.
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“Onshore compression is now anticipated to start out in 2029, one 12 months after the unique plan”, Equinor mentioned in a press release on its web site. The assertion didn’t say whether or not the shift to electrified operation at Hammerfest LNG would even be delayed.
It mentioned the “worse than regular” winter in 2024-25 restricted work “in sure areas of the plant”. Moreover an prolonged summer time turnaround in 2025 “postponed the resumption of undertaking work on Melkøya”.
In the meantime the price estimate has now been raised to over NOK 20 billion. “When the PDO [plan for development and operation] was submitted to the authorities in 2022, the unique value estimate was NOK 13.2 billion”, Equinor famous. “Adjusted for inflation, this corresponds to NOK 14.7 billion”.
Equinor cited “elevated engineering prices on account of extra advanced integration into current services”.
It added, “Excessive inflation has led to a big enhance in prices for the acquisition of kit”.
“Snøhvit Future is about midway accomplished”, mentioned Trond Bokn, Equinor senior vice chairman for undertaking improvement. “It’s demanding to execute such a big undertaking in an working plant. As well as, there was an in depth turnaround at Melkøya this 12 months, and we underestimated the complexity of planning and executing the undertaking underneath these circumstances. We additionally had non permanent security shutdowns which have affected progress”.
Equinor famous Snøhvit Future had not been prepared for the autumnal reporting of up to date value estimates for Norway’s nationwide funds “but it surely was communicated that investments would enhance”.
Snøhvit, the primary hydrocarbon improvement within the Barents Sea in line with Equinor, has been producing since 2007.
Hammerfest LNG, put onstream 2027 and restarted 2022 after a 2020 fireplace, cools fuel into liquefied pure fuel for export abroad. It has a declared manufacturing capability of 6.5 billion cubic meters (229.55 billion cubic ft) a 12 months.
Snøhvit provides the liquefaction plant by way of a 143-kilometer (88.86 miles) pipeline. Feed fuel started flowing from the Askeladd subject December 2022.
Earlier this 12 months Equinor put onstream a brand new supply subject. The NOK 3-billion Askeladd West holds recoverable volumes of about 15 Bcm, in line with Equinor.
Equinor operates Snøhvit with a 36.79 % stake. Petoro AS, additionally state-owned, owns 30 %. TotaEnergies SE holds 18.4 %, Var Energi ASA 12 % and Harbour Power PLC 2.81 %.
To contact the writer, electronic mail jov.onsat@rigzone.com
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