Equinor plans to invest $1.3 billion in Hammerfest LNG upgrade and electrification

Norwegian energy player Equinor and its partners in the Snøhvit project have revealed plans to invest NOK 13.2 billion (around $1.3 billion) in upgrading the Hammerfest LNG (HLNG) plant at Melkøya with onshore gas compression and electrification.

Illustration / Courtesy of Equinor

On 20 December, Equinor submitted a plan for development and operation (PDO) of Snøhvit Future to the Minister of Petroleum and Energy on behalf of the Snøhvit partnership to secure the future of the Hammerfest LNG.

Snøhvit Future – illustration. Courtesy of Equinor

The licence owners of Snøhvit are Equinor Energy ASA (36.79%), Petoro AS (30.00%), TotalEnergies EP Norge AS (18.40%), Neptune Energy Norge AS (12.00%) and Wintershall Dea Norge AS (2.81%).

According to Equinor, onshore gas compression will provide enough flow from the reservoir to extend plateau production and maintain high gas exports from HLNG beyond 2030. Electrification will reduce CO2 emissions from HLNG by around 850,000 tonnes per year.

“Snøhvit Future will strengthen Norway’s position as a reliable and long-term supplier of LNG to Europe. Electrification will allow us to deliver this gas with close to zero greenhouse gas emissions from production. The project will secure long-term operations and gas exports from Melkøya towards 2050”, said Geir Tungesvik, Equinor’s Executive Vice President for Projects, Drilling & Procurement.

During normal production conditions, HLNG delivers 18.4 million standard cubic metres of gas per day, or 6.5 billion cubic metres per year.

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“Snøhvit Future is a comprehensive and complex project in which expertise, collaboration, and experience in the Norwegian petroleum cluster and within the partnership have brought us to an important final investment decision. The project has good socioeconomic benefits and will create strong ripple effects in the north”, added Tungesvik.

As explained, three large modules will be installed at the plant, which will also be subject to extensive modifications. In addition, there will be a high activity level in the Hammerfest region, such as the construction of a tunnel and a transformer station to bring electric power to Melkøya.

Statnett will construct a 420 kV power line from Skaidi to Hyggevatn and the Snøhvit partners will provide a considerable investment contribution.

Grete B. Haaland, Senior Vice President for Exploration and Production North, described the decision to convert to electric operations at HLNH as one of the largest individual emission reduction measures for decarbonisation of oil and gas production in Norway.

Electrification entails replacing the current gas turbine generators with power from shore. This will cut emissions equivalent to 13% of the oil and gas industry’s overall 55% emissions reduction by 2030. The project’s emissions reductions correspond to 2% of Norway’s annual emissions, Equinor said.