Equinor assembling supplier team for Barents Sea project
Norwegian energy giant Equinor is putting together a team of Norwegian suppliers for the development of its operated Wisting field in the Barents Sea with an investment into the project estimated to be in the range of $7.1-$8.8 billion.
Following a letter of intent for Aker Solutions in October 2021, Equinor has now formally entered into a contract with the company for the front-end engineering and design (FEED) of a floating production and storage vessel (FPSO) for the Wisting field. Valued at around NOK 350 million, the study includes an option for engineering, procurement, construction, and installation (EPCI) calculated at NOK 8-12 billion.
Furthermore, several FEED studies have been awarded following the Wisting partners’ decision to pursue the project (decision gate 2). The studies have been awarded to FMC Kongsberg Subsea, Technip Norge, Aker Solutions, OneSubsea Processing, IKM Ocean Design, Subsea 7, NOV, and Baker Hughes. The main part of this work will be carried out in Norway.
Announcing the deals on Wednesday, Equinor said it is cooperating with the Petro Arctic supplier network, which is mapping and having a dialogue with the supplier market in North Norway. A supplier seminar is planned to be held in 2022.
Geir Tungesvik, senior vice president for project development at Equinor, said: “We plan to submit the plan for development and operation (PDO) to the authorities at the end of 2022. A decision to develop the Wisting field will generate considerable value for Norwegian society and spin-offs for Norwegian supplier industry both in the development and operations phases.”
The Wisting field is a standalone field development in the Barents Sea, containing close to 500 million barrels of oil equivalent. Capital investments are expected to be in the order of NOK 60-75 billion. The concept chosen for the Wisting development involves a circular FPSO and a power-from-shore solution to be integrated into the technical solution, resulting in very low CO2 emissions from the field.
Aker Solutions’ FEED contract includes an EPCI option. A floating production unit is to be developed in the FEED phase and Aker Solutions will be responsible for creating an overall solution covering topside facilities, living quarters, and a hull. The supplier expects the total scope of work to involve around 5500 person-years. Any exercising of the option will take place at an investment decision, which is expected in late 2022.
Involving up to 270 people, the FEED work will mainly be carried out in Norway and Leirvik and Sevan SSP will contribute as sub-suppliers of engineering services for the living quarters and hull, respectively.
Equinor is the operator of the Wisting field with a 35 per cent interest and its partners are OMV (25 per cent), Petoro (20 per cent), Idemitsu (10 per cent), and Lundin Energy (10 per cent).
However, OMV is on track to exit the project through a sale of its entire interest to Lundin, announced in late October 2020. Lundin, on the other hand, is looking to solidify its position in the Wisting area, which will become a core production area for the firm. The deal is expected to be completed during the fourth quarter of 2021.