Rise in costs to $1.98 billion among factors impacting Equinor’s low-emission gas project

December 22, 2025, by Melisa Cavcic

Norwegian state-controlled energy giant Equinor has revealed an increase in costs for a project anticipated to strengthen Norway’s position as a reliable and long-term supplier of gas produced with very low greenhouse gas (GHG) emissions. The company explains that onshore compression is now expected to start in 2029, one year after the original plan.

Snøhvit Future (illustration); Source: Equinor

The Norwegian government gave its blessing for the Snøhvit Future project in August 2023 to secure energy supply to Europe towards 2050 through onshore compression from 2028 and electrification from 2030 of the Hammerfest LNG facility, an onshore plant on the island of Melkøya that receives and processes the natural gas from the Snøhvit field through a 143-kilometer pipeline.

However, the project has been postponed by a year compared to the original plan, and cost estimates have increased by approximately NOK 4 billion ($395.4 million) since 2024; thus, the total cost estimate is now more than NOK 20 billion (around $1.98 billion). When the plan for development and operation (PDO) was submitted to the authorities in 2022, the original cost estimate was NOK 13.2 billion ($1.3 billion). After being adjusted for inflation, this corresponds to NOK 14.7 billion ($1.45 billion).

Factors that have affected the progress and the cost development of the project over the past year encompass the weather in the winter of 2024/2025 being worse than normal, limiting work in certain areas of the plant; increased engineering costs due to more complex integration into existing facilities; the turnaround in the summer of 2025 being extended which postponed the resumption of project work on Melkøya; and high inflation that led to a significant uptick in costs for the acquisition of equipment.

According to Equinor, this project secures jobs in Hammerfest, Norwegian value creation and energy supply to Europe towards 2050. The development is said to have two purposes: onshore compression to help maintain plateau production on Hammerfest LNG when the pressure in the reservoirs decrease and electrification of the plant to cut annual CO2 emissions by 850,000 tonnes, equivalent to 2% of Norway’s annual emissions.

During the development phase, about 70% of value creation is expected to go to Norwegian companies and more than a third of this to Northern Norway. The project partners are Equinor Energy (36,79%), Petoro (30%), TotalEnergies EP Norge (18,4%), Vår Energi (12%), and Harbour Energy Norge (2,81%).

Trond Bokn, Equinor’s Senior Vice President for Project Development, commented: “Snøhvit Future is about halfway completed. It is demanding to execute such a large project in an operating plant.

“In addition, there has been an extensive turnaround at Melkøya this year, and we underestimated the complexity of planning and executing the project under these circumstances. We also had temporary safety shutdowns that have affected progress.”