Plan for Johan Sverdrup phase 2 approved

May 15, 2019 13:26 CEST
Trond Bokn, senior vice president for the Johan Sverdrup development in Equinor, received the formal approval of the plan for development and operation from Kjell-Børge Freiberg, Minister of Petroleum and Energy.
Trond Bokn, senior vice president for the Johan Sverdrup development in Equinor, received the formal approval of the plan for development and operation from Kjell-Børge Freiberg, Minister of Petroleum and Energy. (Photo: Håkon Fonseca Nordang / Equinor ASA)

The plan for development and operation (PDO) of the second phase of the Johan Sverdrup field development was formally approved by Norwegian authorities on 15 May. The same day sees the construction start of the field’s second processing platform at Aibel’s yard in Haugesund.

“This is a big day for Equinor and the other Johan Sverdrup partners comprising Lundin Norway, Petoro, Aker BP and Total. Johan Sverdrup is a world-class field that will provide value to its owners and society for 50 years ahead with record-low emissions. This truly marks the beginning of the second development phase,” says Anders Opedal, executive vice president for Technology, Projects and Drilling in Equinor.

The project received broad support in the Storting (Norway’s parliament) on Monday 29 April, and today the partnership received the formal approval by the Norwegian Ministry of Petroleum and Energy (MPE).

Johan Sverdrup is the biggest field development on the Norwegian continental shelf since the 1980s. Phase two of the development, with planned start-up in Q4 2022, will increase field production from 440,000 barrels of oil per day to 660,000 barrels per day.

The second development phase has a capital expenditure of NOK 41 billion. In addition to construction of a new processing platform (P2), the development will also include modifications of the riser platform, five subsea systems, and preparations for power supply from shore to the Utsira High in 2022.

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Portraits of Trond Bokn and Anders Opedal
Trond Bokn (left), senior vice president for the Johan Sverdrup development, and Anders Opedal, executive vice president for Technology, Projects and Drilling.

The first phase of the Johan Sverdrup development is approaching 90 % finished and production is expected to start in November this year.

Only a year after the drilling platform was completed and sailed away from Haugesund, the construction of another topside is kicked off at the Aibel yard in Haugesund.

“Johan Sverdrup has played an important role to suppliers and local communities in Norway, including Aibel and Haugesund. With the construction of the second processing platform kicked off here at Aibel’s yard on Risøy, the Johan Sverdrup project will once more become a landmark in Haugesund, which is great,” says Trond Bokn, senior vice president for the Johan Sverdrup development in Equinor.

In the first phase of the Johan Sverdrup development more than 70% of the contracts were awarded to suppliers in Norway. Despite continued strong international competition, the Norwegian share will probably be even higher in the second development phase.

The contract awarded to Aibel for construction of the second processing platform for Johan Sverdrup will help employ up to 1500 people in Haugesund during the construction phase. The Agenda Kaupang analysis agency estimates that the Johan Sverdrup field development may contribute to more than 150,000 man-years in Norway in the period 2015-2025.

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Steel cut for Johan Sverdrup performed by Kjell-Børge Freiberg, Minister of Petroleum and Energy, and Aibel apprentice Hannah Pettersen.
Steel cut for Johan Sverdrup performed by Kjell-Børge Freiberg, Minister of Petroleum and Energy, and Aibel apprentice Hannah Pettersen. (Photo: Håkon Fonseca Nordang)

“Close and good cooperation with our suppliers has been key to the improvements we have seen in the development so far. Bringing considerable experience and expertise into the second construction phase – which we are currently doing on the processing platform – gives us a sound basis for delivering also the next phase safely, with quality and at cost,” says Bokn.

The Johan Sverdrup field is powered from shore, placing it among the oil and gas fields with the lowest CO2 emissions in the world. In the second phase the field will also supply shore power to other fields on the Utsira High, including the Edvard Grieg, Gina Krog and Ivar Aasen fields. Emission reductions from Johan Sverdrup alone are estimated at more than 620,000 tonnes of CO2 on average per year, corresponding to annual emissions from 310,000 private cars.

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Facts about the Johan Sverdrup processing platform number two (P2)

  • Being developed by Aibel, processing platform number two (P2) will increase production capacity on the field from 440,000 barrels of oil per day to 660,000 barrels per day
  • The platform will also host the converter unit (HVDC) receiving power from shore to the Johan Sverdrup phase two development and to the other fields included in the Utsira High area solution
  • The processing platform weighs around 25.000 tonnes and consists of three modules. The main support frame (MSF) is being constructed at Aibel’s yard in Thailand, the converter unit will be built partly in Spain and in Haugesund, and the processing module will be constructed in Haugesund. After module assembly the platform will be completed at the Haugesund yard before offshore installation in 2022.
  • Aibel is one of the main suppliers to Johan Sverdrup. In addition to building the processing platform number two, and the bridge that will connect it with the rest of the field centre, Aibel is also responsible for the drilling platform topside delivered in the first development phase, and for construction of the converter substations for the power-from-shore solution for the field in both the first and second phase of the project. Aibel is also responsible for a number of offshore hook-up activities in connection with the first development phase.

Facts about Johan Sverdrup

Phase 1

  • Includes the development of four platforms (accommodation and utility platform, processing platform, drilling platform, riser platform), three subsea installations for water injection, power from shore, export pipeline for oil (Mongstad) and gas (Kårstø)
  • Under development. Nearly 90% of the development is completed
  • Contracts worth more than NOK 60 billion have been awarded. Over 70% of the suppliers have a Norwegian billing address
  • Production capacity of 440,000 barrels of oil per day
  • CAPEX estimate: NOK 86 billion (nominal terms based on fixed currency)
  • Production start expected in November 2019

Phase 2

  • Includes development of another processing platform for the field centre + the Avaldsnes, Kvitsøy and Geitungen satellite areas, in addition to the power-from-shore supply to the Utsira High (including the Edvard Grieg, Ivar Aasen and Gina Krog fields) by 2022
  • The plan for development and operation was discussed and approved by the Storting on 29 April 2019, and formal approval from Norwegian authorities was received by the partnership on 15 May 2019
  • Additional production capacity of 220,000 barrels of oil per day
  • CAPEX estimate: NOK 41 billion
  • Production start expected Q4 2022

Full field (Phase 1 + Phase 2)

  • Includes both phase 1 and phase 2 of the Johan Sverdrup development
  • Resource estimate in the range of 2.2-3.2 billion barrels of oil equivalent (with expected resources of 2.7 billion boe)
  • Total production capacity of 660,000 barrels of oil per day
  • Break-even price: below USD 20 per barrel
  • PARTNERS: Equinor: 40.0267% (operator), Lundin Norway: 22.6%, Petoro: 17.36%, Aker BP: 11.5733% and Total: 8.44%