Norway's Equinor has awarded a NOK 900 million ($107 million) contract to local contractor Kvaerner for delivery of the steel substructure for the Johan Sverdrup Phase 2 process platform.
The engineering, procurement and construction (EPC) award will see Kvaerner deliver the fourth substructure for the Johan Sverdrup Field in the Norwegian North Sea, one of the world's largest ongoing offshore projects.
The steel jacket substructure for the Phase 2 process platform will be delivered from Kvaerner's specialized facility in Verdal, Norway during spring 2021. The activity will be at its highest from September 2019 to May 2020, when 300 employees will be working on the project, Kvaerner noted.
The new delivery includes engineering, procurement and fabrication. Kvaerner will also perform load-out and sea-fastening of the complete steel jacket substructure on a barge before sail-away to the field. The engineering work will be performed at Kvaerner's offices in Oslo and will start immediately. The project management will be based at Kvaerner's yard for advanced steel substructures in Verdal, where prefabrication will start early in the summer of 2019. When completed, the steel jacket will weigh slightly above 12,300 metric tons.
“With this contract, Kværner and the Norwegian supplier industry has once again proved it is competitive in an international market. In the first phase of the Johan Sverdrup development more than 70 percent of the contracts were awarded to suppliers in Norway. With this contract to Kværner, we expect an even higher share of Norwegian suppliers in the second phase of the development,” said Trond Bokn, senior vice president for the Johan Sverdrup development.
"The award of yet another contract won in international competition confirms Kvaerner's position as one of the industry's leading contractors for steel jacket substructures. In 2017 and 2018, Kvaerner delivered three out of the four jackets which are part of the first phase of the field development. Through a very effective cooperation with Equinor, we delivered all these three platform substructures to agreed quality, schedules and budgets. I am pleased to see that our customers confirm that we are a contractor offering an attractive combination of technical expertise and cost efficiency," said Kvaerner's President & CEO Karl-Petter Løken.
Today's award, together with previous contracts for deliveries to Valhall Flank West and modules for the Johan Castberg FPSO, will increase the opportunities for strategic development of the expertise at the Verdal facility for the coming years. The order book provides a good foundation for activity at the yard until spring 2021.
"With the delivery of the substructure for Johan Sverdrup Phase 2 combined with the other order backlog, we have a good foundation for continuous improvement and long term planning around future development of Kvaerner in Verdal. We have long experience from providing our customers with complete, integrated deliveries. Over the last few years, we have taken new steps for industrializing how we execute projects. This, combined with long term relations in the supplier's market, enables us to offer flexibility to our customers," said EVP Structural Solutions Sturla Magnus.
The first phase of the Johan Sverdrup project is expected to start production in November next year and includes four installations with steel substructures: A utility and living quarters platform, a drilling platform, a riser platform and a processing platform.
The second phase of the Johan Sverdrup project will also have a jacket-based processing platform, and modifications are made to the field center to expand production capacity from 440,000 barrels of oil per day to 660,000 barrels of oil per day.
Kvaerner has been a main contractor to the majority of Norway's oil and gas platforms. The new steel substructure will be number 46 in a series of substructures from Kvaerner in the last 45 years.
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