Equinor to invest Hammerfest LNG

03 January 2023

The Hammerfest LNG plant at Melkøya. (Photo: Ole Jørgen Bratland / Equinor)

The partners that manage the Snøhvit license offshore Norway announced plans to invest NOK 13.2 billion (USD $1.3 billion), in upgrading the Hammerfest LNG plant at Melkøya, Equinor said.

Snøhvit Future Project consists of two developments: Snøhvit Onshore Compression and Snøhvit Electrification. The partnership plans to upgrade the onshore compressor, transformer station and electric steam boilers on Melkøya, to boost grid connection including a transforming station at Hyggevatn, and to develop new power capacity from Skaidi to Hammerfest.

Onshore compression will help maintain sufficient inlet pressure for the LNG plant as the reservoir pressure drops. It will also reduce the risk of accumulation of fluid liquids in the long multiphase pipeline from field to shore. This will give a longer operational window and extend plateau production, Equinor said.

Electrification of the Melkøya plant will minimize emissions from LNG production, leading to an annual emission reduction of close to 850,000 tonnes of CO2, equivalent to the emissions from 5,000 fossil-fuelled (ICE) cars. It will reduce the carbon footprint from LNG production at Melkøya from 3.8 to 0.6 g CO2e/MJ, Equinor said.

Onshore compression and conversion to electrical operation of HLNG are scheduled to start in 2028. Three modules will be constructed: a module for a feed gas compressor, a module for electrical steam boilers and a transformer station.

The additional onshore gas compression will provide enough flow from the reservoir to extend plateau production and maintain high gas exports from HLNG beyond 2030. Electrification will reduce CO2 emissions from HLNG by around 850,000 tonnes per year, Equinor announced.

Geir Tungesvik, Equinor’s executive vice president for Projects, Drilling & Procurement, delivered the plan for development and operation of Snøhvit Future to Terje Aasland, Minister of Petroleum and Energy.

“Snøhvit Future will strengthen Norway’s position as a reliable and long-term supplier of LNG to Europe. Electrification will allow us to deliver this gas with close to zero greenhouse gas emissions from production. The project will secure long-term operations and gas exports from Melkøya towards 2050,” says Geir Tungesvik, Equinor’s executive vice president for Projects, Drilling & Procurement.

During normal production conditions, HLNG delivers 18.4 million standard cubic metres of gas per day, or 6.5 billion cubic metres per year. This is equivalent to the energy demand of around 6.5 million European homes, or 5% of all Norwegian gas export, Equinor said.

“Snøhvit Future is a comprehensive and complex project in which expertise, collaboration, and experience in the Norwegian petroleum cluster and within the partnership have brought us to an important final investment decision. The project has good socioeconomic benefits and will create strong ripple effects in the north,” Tungesvik said.

Three large modules will be installed at the plant, which will also be subject to extensive modifications. In addition, the companies plan to build a tunnel and a transformer station to bring electric power to Melkøya.

Higher demand for power to HLNG will trigger Statnett’s construction of a 420 kV power line from Skaidi to Hyggevatn and the Snøhvit partners will provide a considerable investment contribution. The new line will strengthen the power infrastructure by providing higher grid capacity to Hammerfest, paving the way for new industrial developments in the area.

Equinor Energy ASA holds a 36.8% stake in the Snøhvit license and is the managing partner. Other partners include Petoro AS (30%), TotalEnergies EP Norge AS (18.4%), Neptune Energy Norge AS (12%) and Wintershall Dea Norge AS (2.81%).

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