Kværner lands huge Statoil contract

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Western Norway and several other communities around the country were celebrating this week after Norwegian industrial firm Kværner signed contracts on a project expected to generate 4,800 jobs. Kværner will build major sections of a large floating production and storage vessel (FPSO) for Statoil, prompting the mayor in Stord, where Kværner has a shipyard, to raise the flag at City Hall.

The new contract for Statoil’s floating production vessel at the Johan Castberg oil field is expected to generate thousands of jobs, not least here at Kværner’s shipyard in Stord.. PHOTO: Kværner

“This is fantastic news,” Gaute Straume Epland, mayor of Stord, told state broadcaster NRK. “It’s a big day for us in Stord. Kværner is our major company and when its activity increases, it creates optimism in the entire community.”

Statoil will use the vessel at its Johan Castberg oil field in the Barents Sea that’s currently under development. The vessel’s hull is being built in Singapore but Kværner secured the contract for the FPSO’s topside modules and their hook-up and integration with the hull. The contract is worth around NOK 3.8 billion (USD 640 million) and Kværner claims it will generate “positive ripple effects” for a “wide spectrum” of Kværner’s suppliers within Norwegian industry.

The work will be carried out up and down the West Coast of Norway. Parts of the vessel’s modules, for example, will be built in Verdal using suppliers to Kværner’s parent company Aker Solutions in Egersund, which in turn will use its facility in Sandnessjøen. The project will be led partly from Oslo and partly from Kværner’s yard in Stord. Aker Solutions earlier won the contract to deliver the subsea system to the Castberg field and design the top deck of the vessel that will be attached to it.

Torger Rød of Statoil (left) and Jan Arve Haugan of Kværner held a contract-signing ceremony on Tuesday. PHOTO: Kværner

The hull is due to be delivered to Kværner’s yard at Stord in 2020, with installation of the modules to begin immediately.

Oil production systems will also be completed and tested at Stord before the vessel is towed into place at the Johan Castberg field not far from Honningsvåg in Northern Norway in the first quarter of 2022. Officials in Northern Norway had hoped for land-based facilities to receive Castberg’s oil and gas, but Statoil was keen to cut costs and opted for an FPSO system when it moved forward with the long-delayed project late last year.

That disappointed political and business leaders in Northern Norway, while officials in Southern Norway are now delighted. “This will mean around 2,000 jobs at Stord,” said Epland, the mayor of Stord. “That’s formidable.”

Kværner will also spend NOK 370 million (nearly USD 50 million) building a new pier for the vessel at the shipyard in Stord. “We have raised the flag at City Hall today,” Epland told NRK, “and everyone is walking around with a big smile.”

Flags were also waving in nearby Haugesund, since the region is viewed as one work-and residential market. May Britt Vihovde, vice-mayor in Haugesund, said the contract would thus create new jobs or secure existing ones in the area. Another large industrial concern in Haugesund, Aibel, also won a large contract tied to the Snorre A platform. “This shows that we can compete on an international basis,” Vihovde said.

Oil Minister Terje Søviknes, who has been stressing recently that Norway will maintain firm and consistent oil and tax policies despite looming challenges to them, also said the contract would secure development of the Johan Castberg oil field. It’s bound to further boost rising optimism in the oil industry in general, which is recovering from the oil price collapse in 2014.

newsinenglish.no/Nina Berglund