Equinor and partners plan to invest Nkr10 billion (US$1.1 billion) to boost gas production from the Oseberg field, offshore Norway, while also reducing carbon dioxide from key infrastructure at the asset.
The state-owned company has confirmed that an amended plan for development and operation (PDO) has been submitted to the Minister of Petroleum and Energy, Marte Mjos Persen.
Oseberg, until now primarily being an oilfield, will become a substantial gas producer with large remaining resources to be extracted.
Two new compressors will be installed to boost recoverable gas volumes and the Oseberg Field Centre and Oseberg South platform will be partially electrified.
“It is important to Equinor and the Oseberg partners to produce oil and gas with the lowest possible emission level. This investment decision allows us to increase production of Oseberg gas considerably in the future, while reducing CO2 emissions by an estimated 320,000 tonnes per year,” said Geir Tungesvik, Equinor’s senior vice president for project development.
“During the project planning we have received good support from and co-operated closely with our partners. We are now entering the execution phase together with highly qualified suppliers.”
As part of the Oseberg revamp, three modules totalling 3400 tonnes will be installed and plans envisage start-up of the new facility in 2026.
It is estimated that more than 70% of investments in the Oseberg upgrading will go to suppliers in Norway.
Plethora of awards
Aibel has won a contract worth upwards of Nkr4 billion for the engineering, procurement, construction, and installation for partial electrification of the Oseberg Field Centre and Oseberg South, as well as upgrading the gas processing capacity on the Oseberg Field Centre.
The workscope, which follow its completion of the front-end engineering and design work, includes electrical installations in a new substation at Kollsnes.
The three modules will be constructed at Aibel’s yard in Haugesund and most of the engineering and management will be carried out at the contractor’s office in Bergen, supported by its offices in Stavanger and Oslo.
Nexans has been awarded a Nkr800 million-plus framework contract by Equinor for delivering subsea power cables and its first assignment will be to deliver a 132-kilometre cable for Oseberg. The cables will be fabricated in Halden and are scheduled to be installed in 2023 by Nexan’s new vessel, Nexans Aurora.
Meanwhile, Heerema Marine Contractors of the Netherlands has secured the estimated Nkr60 million transport and installation contract. In the summer of 2024, Heerema’s vessel Sleipnir is scheduled to install the three modules being built by Aibel.
Also, Skanska Norge has been awarded a contract for the construction of a substation, cable trenches and landfall at Kollsnes. This contract is a co-operation with the Troll West electrification project.
All the contracts are subject to government approval of the Oseberg PDO.
Emissions reduction goal
Oseberg’s emissions last year totalled about 1 million tonnes of CO2. Since 2010, emissions at Oseberg have been reduced by about 15%, and there is an ambition of further reducing emissions by 50% to 70% by 2030. The new compressors and electrification from shore will be vital to achieve this ambition.
“If the world is to reach its net-zero emission goal, we must remove emission sources, also on the NCS [Norwegian Continental Shelf]. Electrification is an effective climate action as it involves large and swift emission cuts. The solution adopted gives a cut in emissions of about 50% from the Oseberg Field Centre and the Oseberg South platform, representing an important move to continue the long-term value creation from the Oseberg area,” said Geir Sortveit, Equinor’s senior vice president for exploration and production west.
In March, Equinor obtained a licence from the Ministry of Petroleum and Energy to construct, own and operate necessary electrical facilities to provide the Oseberg Field Centre and the Oseberg South platform with power from shore.
Oseberg will have a total power demand of up to 105 megawatts and the project will also prepare for any future full electrification of the installations.
Oseberg is the third-largest oil producer ever on the NCS. When Oseberg came on stream, it was expected to produce about 1 billion barrels of oil. Today it is expected to produce a total of about 3.2 billion barrels of oil. Oil production is in the tail phase, but 60% of the gas resources are still in the ground.
“With this investment we open a new chapter of the story of Oseberg, which is about to become one of the main Norwegian gas producers. We expect Oseberg to produce more than 100 billion standard cubic metres of gas towards 2040. In terms of energy, the annual gas export from Oseberg will equal a quarter of all Norwegian hydropower,” Sortveit added.
The Oseberg partners are operator Equinor with 49.3%, Petoro holding 33.6%, TotalEnergies with 14.7% and ConocoPhillips owning 2.4%.
Aibel chief executive Mads Andersen said: "This week we have consolidated our position as the leading supplier of solutions for electrification of offshore and onshore production and processing plants. We are proud to play a central role in the work to decarbonise Norwegian oil and gas production. As known, the Norwegian oil and gas industry has an ambition to reduce CO2 emissions from the shelf by 40% within 2030."
"The Oseberg contract means that for the first time the share of renewables in Aibel's order backlog is greater than the oil and gas share. Renewables now account for more than 60% of the order backlog of about Nkr14 billion, of which offshore wind and electrification roughly account for an equal share. This is a milestone in our transformation towards renewables," Andersen added.
- Norway's Petoro says 'extreme' gas prices are not sustainable
- Equinor profits surge on high gas prices
- Norway to increase exports to gas-starved European market
- Aker BP hands out significant Noaka project awards
- Switched on: Norway approves pioneering Northern Lights carbon transport and storage scheme