The projects in question have a total investment framework of 198 billion kroner, from commencement to commissioning.
“Equinor has a good portfolio of profitable projects being developed in Norway, which will contribute to long-term security of supply of oil and gas to Europe. In 2023, our developments contributed to high activity and 25 billion kroner to the Norwegian supplier industry. Together with our partners and the industry, we have completed six projects during the past year,” says Trond Bokn, head of project development in Equinor.
The reported projects have seen a cost increase of 6.5 billion 2024-NOK over the past year, which is about 3 per cent. The overall increase since the plans for development and operation (PDOs) is 32.9 billion 2024-NOK. Currency effects account for 12.4 billion of this. If the Johan Castberg project and currency effects are omitted, the cost increase for the reported projects is around 3 percent since PDOs.
Two of the projects, Johan Castberg and Oseberg gas compression and partial electrification, have experienced a post-PDO increase of more than 20 percent, and are therefore mentioned specifically in the proposed national budget.
Johan Castberg
The production ship is now anchored at the field and Johan Castberg is on track for start-up towards the end of the year.
The cost increase in the project is 2.2 billion 2024-NOK since last year. This is due to a longer stay than estimated at Aker Solutions at Stord, currency effects and a general cost increase. Of this, almost NOK 800 million is currency effects. Since the PDO, estimated costs have grown by 25.7 billion 2024-NOK. Currency effects account for 8.1 billion of this.
Oseberg gas phase 2 and power from shore (OGP)
OGP is composed of partial electrification of the Oseberg Field Centre and Oseberg sør, as well as installation of a new compressor module at the field centre.
The cost increase over the past year is 1.2 billion 2024-NOK. Since the PDO, the cost increase is about NOK 2.5 billion in 2024-NOK. Since the PDO, estimated costs have grown by around 2.5 billion 2024-NOK. This is a result of longer delivery times for new transformers that were destroyed in a fire at Hitachi’s factory in Vaasa in 2023, as well as delays related to increased complexity. Planned commissioning has been postponed from 2026 to late 2027.
Snøhvit Future
Snøhvit Future encompasses onshore compression and electrification of Hammerfest LNG on Melkøya. Since the PDO, the cost increase is 1.9 billion 2024-NOK. More than 500 million of this relates to currency effects.
One of the main reasons for the higher costs is the joint venture’s decision to change the design of an electric boiler as a result of safety considerations.
