Ormen Lange NOK 1 billion subsea contract awarded

November 25, 2003, 15:15 CET

Norsk Hydro today awarded a contract to FMC Kongsberg Subsea AS for engineering, procurement, construction and testing of the subsea production system, as well as options for further equipment deliveries. The contract - awarded on behalf of the Ormen Lange license group - is valued at approximately NOK 1 billion, excluding options.

A separate agreement for service, maintenance, and assistance related to installation and rental of various tools for intervention and tie-in of the Ormen Lange-field has also been signed with FMC Kongsberg Subsea AS.

The Ormen Lange subsea production system includes initially two subsea templates with manifolds, eight Christmas trees, control systems, intervention system, tie-in tools, as well as end terminations and Tee’s for 30” gas pipelines.

The contract also includes options for delivery of eight additional Christmas trees, including control systems, as well as potential further equipment deliveries in the future. This includes two additional complete templates, eight Christmas trees with control systems, tie-in tools and end terminations. The agreement for technical services also includes and option for service and maintenance in the operations phase of the Ormen Lange field.

Ormen Lange is the largest gas field under development on the Norwegian continental shelf. It is located 100 km off the northwest coast of Norway at a water depth of 800 to 1,100 meters. The planned gas export volume to England is about 20 percent of Norway’s gas exports and 20 percent of UK gas market demand.

Ormen Lange’s untreated well stream will be transported onshore to Nyhamna in Mid Norway in two 120 km long, 30” flowlines. Here it will be processed, before being exported in the 1,200 km long subsea transport pipeline to Easington in the UK.

Hydro is operator for Ormen Lange during the development phase, including all field development, the onshore gas processing plant, and export pipeline project.  Shell is the production operator for the Ormen Lange field and onshore plant, while Gassco is the operator for the export pipeline in its operations and de-commissioning phases.

The contract awards are conditional on the Plan for Installation and Operation (PIO) and the Plan for Development and Operation (PDO) with submittal in December 2003, and subsequent governmental approval of the plans. Production start of the Ormen Lange field is planned for October 2007.

Partners in the Ormen Lange licence: Norsk Hydro (17.956 %, operator development phase), Shell (17.200 %, operator production phase), Petoro (36.000 %), BP (10.888 %), Statoil (10.774 %) and ExxonMobil (7.182 %).

FMC Kongsberg Subsea