First steel cut for two large new oil & gas projects in North Sea

Project & Tenders

September 5, 2023, by Melisa Čavčić

Norwegian oil and gas player Aker BP has celebrated the start of the fabrication phase for two oil and gas projects, which are located in the Norwegian sector of the North Sea. This milestone was achieved by cutting the first steel plates for these projects at Aker Solutions’ yard.

The next two large offshore development projects to be built on the Norwegian Continental Shelf (NCS) – Yggdrasil and Valhall PWP-Fenris – entered the construction phase on 4 September 2023 and the first steel plates were cut for Hugin A and Valhall PWP at Aker Solutions’ Stord yard. Aker Solutions and its alliance partners signed contracts worth close to NOK 50 billion ($4.7 billion) with Aker BP on 16 December 2022. This is the company’s highest-ever quarterly order intake.

Sturla Magnus, executive vice president, New Build, for Aker Solutions, commented: “These projects contribute high-value creation and extensive ripple effects across the entire industry. Aker Solutions will have recruited more than 2,000 new colleagues in Norway, in addition to 100 new apprentices every year, going forward.”

A large part of the scope is four new offshore platforms including steel jackets. The two largest — Hugin A and Valhall PWP — will be assembled and delivered from Aker Solutions’ yard at Stord. The work will be done together with Aker BP, Siemens Energy, and ABB in the fixed alliance facilities.

Knut Sandvik, Aker BP’s SVP Projects, remarked: “It’s fantastic to get started on construction. Now we start seeing the physical result of many years of planning and detailed engineering. These projects will contribute to valuable growth in Aker BP and will be significant for local communities up and down the Norwegian coastline in the years ahead. They will secure activity, jobs, and contribute to further developing the industry that will take Norway into new value chains.”

Aker Solutions explains that the cutting of the first steel plates for Hugin A and Valhall PWP marked an important milestone for these major projects. Aker BP’s project director for Hugin A, Håkon Skofteland, and project director for Valhall PWP-Fenris, Rannveig Storebø, had the honor of pressing the start button, under the supervision of Aker Solutions apprentices, Denise Åkerøy and Tor Litlabø.

“This day is important not only for Aker BP, Aker Solutions, license partners, and strategic partners but for the entire supplier industry. After years of engineering and preparations, we are now entering the construction phase. These projects will involve hundreds of suppliers and provide large ripple effects in the form of revenue and jobs in local communities throughout large parts of Norway,” added Magnus.

What do these projects entail?

Yggdrasil, which consists of the Hugin, Fulla and Munin licence groups, is located between Alvheim and Oseberg in the North Sea. Aker BP’s partners in the area are Equinor and PGNIG Upstream Norway. The gross resources in the area are more than 700 million barrels of oil equivalent and extensive new infrastructure is planned, including three platforms, nine subsea templates, new pipelines for oil and gas export and power from shore.

The entire Yggdrasil area will be remotely operated from an integrated operations centre and control room onshore in Stavanger. Hugin A, which is expected to be the largest topside ever assembled in the Stord yard area, is a part of the Yggdrasil development and consists of a 28-tonne production platform and a 20,500-tonne steel jacket that will be delivered from Aker Solutions’ yard in Verdal. Aside from Stord and Verdal, Aker Solutions’ yards in Egersund and Sandnessjøen will build modules, while Leirvik will deliver the living quarters.

On the other hand, Valhall PWP-Fenris is a joint development in the southern part of the North Sea. Pandion Energy is the partner in Valhall and PGNiG Upstream Norway is the partner in Fenris, which is situated 50 kilometres away. The development comprises a new centrally located production and wellhead platform linked to the Valhall field centre by a bridge and an unstaffed installation at Fenris that will be tied back to Valhall through pipelines on the seabed.

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The development will use the existing power from shore system. New reserves from the development project are estimated at 230 million barrels of oil equivalent. The project will also secure a lifetime extension for Valhall past 2028. Valhall PWP is a 16,000-tonne production platform for the Valhall field that will be assembled at Stord. The 9,500-tonne steel jacket will be delivered from Verdal. In addition, Sandnessjøen, Worley Rosenberg, and Nymo in Arendal will contribute to the construction work.

Furthermore, the field developments encompass two unmanned platforms – Hugin B and Fenris – which will be delivered from Verdal, while Aibel will deliver the topside for Munin. Aker Solutions’ scope also entails considerable subsea and modification deliveries to the Yggdrasil and Valhall PWP-Fenris fields.

“In the transition to an industrial future of more renewable energy projects, these large installations give Aker Solutions the opportunity to plan long-term. Through a series of upgrades of our yards and facilities, extensive competence-building measures and considerable investments in digitalisation, robotisation and other technology, we improve our efficiency in the execution of these projects and strengthen our competitiveness. This will also provide a solid foundation, as we gradually increase our activity aimed at renewable energy markets,” elaborated Magnus.

According to Aker BP, the event at Stord marks the start of three years of high activity and thousands of jobs at yards and suppliers throughout Norway. The Norwegian share of deliveries in the development projects is around 65 per cent. These development projects are estimated to contribute 130,000 full-time equivalents in Norway, about half of which will be realised in the development phase.

Peter Kupka, project director for fixed facilities deliveries in Yggdrasil, stated: “It is very gratifying to see that the projects are securing activity and boosting competitiveness for suppliers both small and large. Today marks the start of a new phase, with mass mobilisation of people and heavy construction work both in Norway and internationally. We will be there in all the key locations, to follow up important equipment deliveries and keep a close eye on construction work going forward.”

Aker BP claims to be utilising the entire value chain to execute Yggdrasil and Valhall PWP-Fenris with more than 200 supplier companies in Norway making direct contributions to the developments so far. After plans for development and operation (PDO) of multiple oil and gas projects on the Norwegian Continental Shelf (NCS) were submitted to Norway’s Ministry of Petroleum and Energy in December 2022, these were approved on 28 June 2023.

Aker BP awarded a number of contracts for these projects to alliance partners and other strategic suppliers with the total value amounting to tens of billions of kroner. Aker Solutions, Aibel, Subsea 7, MAN Energy Solutions, and ABL Group are among the companies that received these contract awards.

“These development projects will contribute significant value creation and tax revenues for many years to come. They are also important for Aker BP because they help ensure that we can deliver on our ambition to create the oil and gas company of the future, with low costs, low emissions, profitable growth, and attractive returns. And now the ball is rolling!” concluded Sandvik.

The start-up of construction for another one of these recently greenlighted projects, which is known as the Skarv Satellite Project (SSP), was celebrated on Tuesday, 29 August 2023, alongside a number of Aker BP’s employees and partners in the Subsea Alliance (Aker Solutions and Subsea 7), and the Modification Alliance (Aker BP and Aker Solutions).