Aibel Wins Dvalin Modules
Tuesday 4 October 2016
Norwegian contractor Aibel has been awarded a coveted contract to build a pair of new modules for Statoil’s Heidrun platform to receive exports from the Dvalin gas field off Norway.
The award comes hot on the heels of a pair of subsea deals handed to compatriot Aker Solutions, among an estimated Nkr4.5 billion ($564 million) worth of contracts set to be dished out by Dvalin operator Dea in the coming weeks, with local contractors likely to take the lion’s share.
Aibel will fabricate a 4000-tonne gas processing module, as well as a 400-tonne injection module, to receive gas and condensate produced from Dvalin under the contract for which a value was not disclosed in a statement by Dea.
The so-called M20 processing module is due to be installed on the Norwegian Sea platform in 2018 while the other, dubbed M40, is due for installation in 2019, ahead of planned start-up of Dvalin in October 2020.
Gas from Dvalin will be partially processed on Heidrun and then transported in a new pipeline connected to the Polarled route for onward export to the onshore Nyhamna terminal before being further processed and then shipped to UK and European markets.
The Heidrun topsides modifications for tie-in of Dvalin will be planned, executed and operated by Statoil as operator of the platform.
Aibel said it would also clear the area on the platform for installation of the modules and carry out integration work.
Planning and engineering work will start immediately at Aibel’s Oslo office, while fabrication will be carried out at its Haugesund yard on Norway’s west coast, according to a statement from the contractor.
The project will employ 700 personnel at peak on engineering, construction and offshore work, it stated, providing a welcome employment boost for the contractor amid a market slump that has resulted in nearly 40,000 lay-offs in Norway’s oil and gas sector.
However, the award to Aibel is likely to come as a blow for Aker Solutions, which was also competing for the modules contract to fill capacity at its Egersund yard that is understood to be suffering from an acute lack of work.
"This is a very important contract for us and demonstrates our strong and improved competitive ability in a market that continues to pose challenges,” said Aibel’s chief executive Jan Skogseth.
The German operator is also set to hand out shortly contracts for installation of pipelines and production equipment.
Dea Norway managing director Hans-Hermann Andreae said the contracts to be awarded in the near future “will create hundreds of jobs in a demanding time for the supplier industry”.
An estimated 68% of value creation from the project is set to come from Norwegian suppliers and will generate 6000 man-years of employment for the supplier industry, according to Dea.
The awards follow submission of a Nkr10.3 billion ($1.3 billion)development plan for the field that has been held up by wrangling among partners over project economics amid low commodity prices as well as an earlier tariff dispute with the Heidrun licence.
Meanwhile, Danish partner Maersk Oil has decided to sell off its 20% stake in the field, with Dea and state holding company Petoro set to pick up half each.
The proposed deal remains subject to parliamentary approval, a Petoro spokesman was quoted as saying, adding the state entity believes the project “has sustainable economics”.
A Maersk spokesman was quoted as saying the project "would not offer the economic value we would require to justify further investments".
It follows the earlier exit of Austrian participant OMV, which has sold its 20% interest to Petoro, amid earlier reports that there was a rift among partners over the commercial viability of the project.
Following completion of these deals, Dea would increase its operating stake to 50% with Petoro on 30% and remaining partner Edison on 20%, although the latter is also reported to be looking to exit the project.