Shell has awarded Kvaerner with an engineering, procurement,
construction and management (EPCM)
deal for modifications and projects at its Ormen Lange/Nyhamna
onshore facilities on the west coast of
The contract is a framework agreement with duration of six
years, and options for additional two plus two years.
The estimated contract value is Norwegian krone (NOK) 6
billion, excluding options, or just over $1 billion in US
dollars, based on current conversion rates.
"This is a major onshore contract, and the largest of its
kind in Norway this year, said Kvaerner CEO Jan Arve
Haugan. We are proud to have won this important contract,
which we believe demonstrates a faith in our project execution
model and ability to deliver complete solutions to the
"Kvaerner has a strong HSE performance, which was an
important factor in the tender process, said A/S Norske
Shell's project director Bernt
We are particularly pleased that key personnel with
significant experience from similar operations and projects
will be made available for us by Kvaerner, he added.
The Nyhamna gas plant processes natural gas from the Ormen
Lange gas field located in the Møre Basin in the
southern part of the Norwegian Sea.
The contract scope includes all modifications and projects on the Ormen Lange/Nyhamna
facility and is established to meet the expected, significant
increased project activity over the next 5-to-10 years.
This includes the facilities at Nyhamna for gas from
new fields such as Linnorm and Aasta Hansteen (formerly
Several locations involved
Front-end engineering and design (FEED) will commence
immediately, officials said.
The FEED work will take place integrated with Shell in their
offices in Aberdeen, and is expected to run until engineering
starts at the end of 2012.
Meanwhile, a site team will be mobilized to begin some minor
modification work at Nyhamna.
Engineering and project management activities will be
conducted by Kvaerner at Stord and engineering and modification
work will be delivered by Aker Solutions' offices in Oslo,
Kristiansund and Tromsø.
When finalized, the sub-contract with Aker Solutions is
expected to represent approximately NOK 850 to 950 million. In
addition, a large number of suppliers from mid-Norway will be
involved in various project activities.
Once fully mobilized, at least 500 employees are expected to
be working in rotation on site at Nyhamna.
In addition, more than 200 engineers and management will be
working on the contract throughout the period. Of these, around
80 will, by the end of next year, be working out of
Tromsø, the company said.
"It is our ambition to establish a presence in central and
northern Norway, and to strengthen our ties with companies and
communities in these regions, said Haugan. The oil
and gas business is migrating north, and this contract will
contribute to the exciting developments in the Norwegian Sea
and the Barents Sea.
"We are pleased that Kvaerner as part of this contract
strengthens its presence in mid- Norway and that they have
chosen to locate much of the engineering work through Aker
Solutions' offices in Tromsø, which we hope will create
significant ripple effects in North Norway", said