Norway: Aibel Bags USD 1 bln Draugen Deal from Shell

A/S Norske Shell has awarded Aibel AS a contract for modifications to the Draugen platform. The contract value is estimated at around NOK 6 billion (USD 1.07 billion).  The contract will run for six years and has options for an additional two plus two years.

“This is fantastic. Norske Shell is a new customer for us and the contract potentially provides us with 10 years’ work on the Draugen field. This is one of the biggest and most important contracts Aibel has signed,” says President and CEO Jan Skogseth of Aibel AS.

Major modifications to Draugen

Draugen is an oil field in the Norwegian Sea with a sea depth of 250 metres (800 ft). First oil started flowing in 1993, and the platform will undergo major upgrading to ensure a significant service life extension. In order to maintain the platform’s integrity, to increase production and to make further development possible, a range of modifications to the Draugen platform are planned in the years to come.

Draugen has been chosen as the host platform for a possible development of Linnorm. The plan is to develop Linnorm with subsea facilities. The gas will be transported via a 50 km long pipeline to Draugen where four new modules, weighing a total of 3,000 tonnes, will process and compress it before sending it ashore. A final investment decision for Linnorm is expected within a year.

Pursuant to the contract that has now been signed, Aibel will carry out numerous modification projects. Shell is planning to expand the living quarters on Draugen by between 45 and 50 cabins. This will then also be part of Aibel’s scope of work. New lifeboats will be installed and existing ones upgraded. Major modifications will also be made to the platform so it can receive the production of up to four new subsea wells.

Four Aibel offices involved

“Aibel can report very good results from modification projects on the Norwegian continental shelf. We have many years’ experience and are now going to ramp up Draugen project organisations at our offices in Stavanger, Oslo, Kristiansund and Harstad. This will therefore have significant ripple effects around the country,” says Skogseth. He adds that Shell has shown the ability and willingness to contribute to the development of Norwegian industry through its investment in Troll, Draugen and Ormen Lange.

The contract will be managed from Stavanger. The largest modification projects will be carried out from Stavanger, Oslo and Harstad. As before, operation-related projects will be located in Kristiansund.

“It is important for us to strengthen our position in Central and Northern Norway. This contract means further growth and new, exciting tasks for us at both Kristiansund and Harstad. It will strengthen Aibel’s growth in Harstad and means an increase of 70 employees in the next years. Aibel will continue today’s commitments related to Draugen operations from Kristiansund. In addition, Aibel will carry out fabrication and base activities in the Kristiansund region,” says Skogseth.

Hundreds on the job

The work includes engineering, procurement, construction management, fabrication, installation and completion. After a period of ramping up in 2012, around 300 engineers and other Aibel employees will be working onshore on the Draugen contract. A further several hundred employees will be working with fabrication and on the platform.

Aibel is one of the largest oil service companies in Norway and is established within renewable energy. The company has 5,000 employees and operations in five countries, including two world-class fabrication yards. Aibel is an engineering company that plans, builds, upgrades and maintains platforms, vessels and production facilities in the oil and gas industry.

[mappress]
Offshore Energy Today Staff, February 28, 2012