Petrojarl Knarr FPSO - Equinor

Wheels are in motion for Rosebank oil project off Shetland

Project & Tenders

Norwegian energy giant Equinor has awarded a key contract for its Rosebank project, securing an already existing FPSO for use on the planned West of Shetland development. The project sanctioning is scheduled for May this year, but this timeline was set back in 2019 and it remains unclear whether it is on track to be made in this expected period.

Petrojarl Knarr FPSO; Source: Altera

Following reports that Equinor has selected an FPSO for the Rosebank project, Offshore Energy has reached out to the Norwegian company, seeking confirmation and further details about the reported deal.

A spokesperson for Equinor told us it had signed a front-end engineering design (FEED) agreement with Altera Infrastructure for the redeployment of the Petrojarl Knarr FPSO. Equinor signed the contract on behalf of the Rosebank partnership, which includes Siccar Point Energy and Suncor Energy.

What is interesting to note here is that the Rosebank is located close to the Siccar Point-operated Cambo oilfield. The proposed development of this field caused quite a stir last year followed by an exit by Shell – Siccar Point’s now-former partner with a 30 per cent interest – and a suspension of the project by Siccar Point.

The spokesperson for Equinor also said that the FEED agreement with Altera is “part of our work to mature and improve the project.”

What is already well-known about the Petrojarl Knarr FPSO is that it has been operating for Shell on the Knarr field, located in the northern sector of the North Sea, since March 2015. The vessel has a production capacity of 63,000 barrels of oil equivalent per day and a storage capacity of 800,000 barrels.

According to information available from Altera, the FPSO is scheduled to cease production on the field in May this year after which the decommissioning is expected to begin. This timeline for the FPSO shutdown coincides with Equinor’s planned investment decision for the project but more on that later.

The Rosebank field was discovered in 2004 and lies about 130 km northwest of the Shetland Islands in water depths of approximately 1,110m. The potentially recoverable volumes at Rosebank are expected to be more than 300 million barrels and it is said to be one of the largest undeveloped fields on the UKCS.

Rosebank project map; Source: Equinor
Rosebank project map; Source: Equinor

Equinor took over the operatorship of the Rosebank project from Chevron in January 2019. At the time, the project was progressing toward development with the selected design calling for a subsea development tied back to an FPSO vessel, with natural gas exported via pipeline.

However, by February 2019, Equinor decided to revise the original development plan for Rosebank, taking some time for a detailed assessment of the concept and seeking to leverage experience from its other project concepts such as Johan Castberg. The FPSO hull for this project has recently started its journey from a shipyard in Singapore to Norway, expected to last about 50 days.

Sure enough, in June of the same year, the Norwegian operator set a new timeline for the project, scheduling a final investment decision (FID) by May 2022. The announcement came on the heels of a three-year extension for the Rosebank licenses by the UK Oil and Gas Authority.

The opportunity to reduce development costs, capture more value, and learn from its other projects, like Canada’s Bay du Nord, were some of the reasons behind the updated timeline.

Offshore Energy has also asked Equinor whether there have been any changes to the project’s timeline and if the FID is still scheduled to be taken by May 2022, but the company is yet to respond to this.

It is also worth reminding that Offshore Energy reported last June that Equinor was looking into using the Knarr FPSO for Rosebank and considering the power-from-shore option as the vessel was constructed to allow this option. The electrification from shore would be in line with the UK’s efforts to decarbonise oil and gas operations as part of its net-zero journey.

Altera Infrastructure told us at the time that the company was fully engaged in a concept study with Equinor for the possible redeployment of an FPSO to the Rosebank field, with Petrojarl Knarr FPSO being a strong candidate for redeployment in harsh waters.