Contractors for Ormen Lange subsea compression selected

July 10, 2006, 16:00 CEST

Hydro, on behalf of the Ormen Lange partners, has selected contractors for the two subsea compression pilot programs - the subsea compression station pilot and the long step-out power supply pilot.

Full execution of these contracts is subject to the Ormen Lange partners' approval of the work program and budget for the subsea compression pilot. Pending this approval, a limited scope and cost exposure has been agreed. The Ormen Lange partners are expected to reach their final decision later this year.

Aker Kværner Subsea AS has been selected to engineer, procure and construct a full-size subsea compression station pilot, and Vetco Aibel AS has been selected to engineer, procure and construct a long step-out power supply pilot.

Two years testing

After delivery, the two pilots will be tested for two years at the Ormen Lange gas treatment facility at Nyhamna to qualify the subsea compression technology for commercial use. The subsea compression pilot, if qualified, represents one of the four compressor trains required for permanent subsea compression of the Ormen Lange field. The long step-out power supply pilot represents the equipment required to supply electrical power and control signals to the permanent subsea compressor station some 120 km from shore.

The execution of the contracts will be cancelled if the Ormen Lange Partners decide to terminate the subsea compression pilot programme. The qualification of the subsea compression system is not a necessity for gas export from Ormen Lange, but a business opportunity for Ormen Lange to develop a viable and cost effective subsea compression system competing with a compression platform as the future compression alternative for Ormen Lange. It also represents a significant technology step for the industry.

If the Ormen Lange partners decide to continue the pilot programme, the contract value of subsea compression station pilot contract will be approximately NOK 850 million. The contract also includes an option to supply equipment for the permanent subsea compression station. The contract value of long step-out power supply pilot contract will be approximately NOK 97 million. The contract also includes an option to supply the permanent long step-out power supply system.

Subsea tie back

The Ormen Lange gas field, located 120 km west-northwest of Kristiansund, is being developed as a subsea tie-back to shore. The initial development will consist of two templates. Each template will be connected to two pipelines transporting the gas to the shore terminal. The shore terminal is located at Nyhamna, on the island of Gossen close to Molde. The processed gas will be exported through a new 1,200 km long pipeline to the UK market.

For the initial production phase, gas from Ormen Lange will flow to Nyhamna by means of reservoir pressure. Later in the production phase, offshore compression is required in order to maintain the production level and to recover the anticipated gas and condensate volumes. Base case for such offshore compression facility is an offshore platform.

If subsea compression is selected as the future compression alternative, the permanent subsea compression station will be installed at a depth of 860 meters, utilising electrical power from shore. The permanent long step-out power supply will transport the required electrical power and the control signals from shore and 120 km to the subsea compression station at Ormen Lange.