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Melkøya contract with Aker extended

April 14, 2005, 10:10 CEST

A letter of intent has been signed by Statoil with Aker Stord on extending the installation contract for additional work and completion of the process barge for the Snøhvit project at the Hammerfest LNG plant on Melkøya island in northern Norway.

Previously-announced delays to the vessel, under construction at Spain’s Dragados yard in Cadiz, are the principal reason why work-hours are being transferred to Norway. Delays to the work have largely been caused by late delivery of drawings and materials from the main contractor, as well as test failures with three compressors which had to be repaired.

Aker Stord, part of Norway’s Aker Kvaerner engineering group, was awarded the contract to install and hook up the mechanical units on the barge in September 2003.

Being extended from the end of 2005 to the summer of 2006, the contract is hourly-based and reflects the expected scope of work to be transferred to the process barge. The value of the contract is dependent on the total work that is executed, up to NOK 1 billion, which lies within the NOK 51.3 billion cost framework for the project.

The Hammerfest LNG plant will process and liquefy gas from the Snøhvit field in the Barents Sea for export.

The process barge is due to be shipped from Cadiz on a heavy-lift vessel during late June for installation in the dock at Melkøya at the end of July.

Statoil is still planning to start deliveries of liquefied natural gas from the Hammerfest LNG facility in the autumn of 2006.

Snøhvit is an important and forward-looking project because it makes Statoil an LNG player with global perspectives and provides an entry ticket to the rapidly expanding US gas market.

Taken as a whole, Snøhvit is technologically crucial for further development of oil and gas projects in the far north.