Norway’s Statoil said it awarded a construction and installation contract to Kværner for the Johan Castberg floating production, storage and offloading vessel (FPSO) in the Barents Sea valued at 3.8 billion Norwegian kroner (US$481 million).
Kværner will utilise a number of yards along the Norwegian coast for the construction work of the FPSO including yards in Sandnessjøen, Verdal, Stord and Egersund.
The contract includes building a total of ten modules, a flare boom and central pipe rack, Statoil said in a statement.
“This is one of the large pieces of the Johan Castberg puzzle, and is a key component of the FPSO,” said Torger Rød, Statoil’s senior vice president for project management control. “The international competition for the contract has been tough, and we look forward to working closely with Kværner in the years to come.”
The construction work is scheduled to last until 2021, followed by a complex assembly period. In this period the topside structure will be installed on the hull and connected to the turret. First oil from the field is scheduled for the first half of 2022.
“The Johan Castberg development will generate substantial spinoffs for Norwegian supply industry in the years ahead. The field is also essential to the further development of industry in Northern Norway, and we are pleased that this contract will help increase activities in the north,” said Pål Eitrheim, Statoil’s chief procurement officer.
Johan Castberg will be the sixth project on stream in Northern Norway. The field has been important to the further development of the oil and gas industry in the north. Thanks to Johan Castberg infrastructure will be developed in a new area of the Norwegian Continental Shelf.
Capital expenditures for the Johan Castberg project are estimated at some NOK 49 billion (capex numbers in nominal terms based on fixed currency) and the jobs generated nationwide during the development are estimated at slightly less than 47,000 man-years.
The field will be producing for more than 30 years, and substantial spinoffs will be generated in the long production phase. Castberg will create considerable activities for Norwegian supply companies and generate ripple effects in Northern Norway. Recoverable resources are estimated at 450 – 650 million barrels of oil equivalent.
Statoil sanctioned projects worth 90 billion Norwegian kroner in 2017 on the NCS. Norwegian suppliers have secured 70 per cent of the contracts related to these projects so far.
The contact is subject to government approval of the plan for development and operation.