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Thursday, June 20, 2024

Ap pulls the plug on rig power plans

The Labour Party (Arbeiderpartiet, Ap) performed a back flip on Tuesday, changing its position after the parliamentary ‘coup’ which saw the opposition unite to demand the full shore-based electrification of the Utsira High oil field during phase one of the project. The other parties were left stunned when Labour announced it now supported the government’s proposal, to hold off on electrification until phase two of the Utsira development.

Norway's parliamentary opposition parties banded together on Friday to demand the government and oil companies implement full electrification of installations in the Utsira High field. PHOTO:
The opposition parties stood united earlier this month, calling for work to begin from phase one on the full shore-based electrification of Utsira High. The government argued that would cause delays to the schedule of the first field under development, Johan Sverdrup. On Tuesday, Labour said it now agreed with Oil and Energy Minister Trond Lien that electrification work on the rest of the fields should wait until phase two. PHOTO:

Labour initially joined with the Liberal, Christian Democrat, Socialist Left, Center and Greens parties on May 16 to form a majority demanding all four Utsira developments be powered with electricity run from the shore, not just the Johan Sverdrup field as Statoil had already agreed. Work had to begin on power cables to the other three planned fields as part of the Sverdrup phase one development.

The show of such unity among the opposition took the Conservative/Progress Party government by surprise, and raised tensions between the coalition and its support parties, the Liberals and Christian Democrats.

In his reply letter to the parliamentary energy and environment committee on Tuesday, Oil and Energy Minister Tord Lien argued the opposition’s solution would create major delays and risk the loss of land-based jobs, reported newspaper Aftenposten. He wrote that the government’s proposal was for full electrification in phase two, some three to five years after the Sverdrup field is due to begin operating in 2019.

“An electrification of the whole Utsira High can be realized without incurring the risk of postponing the start of production of the Johan Sverdrup field, if it is done during stage two of the Sverdrup field’s start-up phase,” Lien wrote. “To establish a cable connection out from this platform, such as the proposal can be interpreted, will mean the platform must be changed.”

“A change to this platform – which has come a long way in pre-engineering – will mean that Sverdrup’s first stage may be postponed, that will increase the implementation risks, create a danger of unforeseen technical challenges, increase the risk of cost overruns and sub-optimal technical solutions,” he said.

Labour backs government proposal
In an about-face, Labour agreed with the government that full electrification should now occur in phase two, instead of in the initial phase as the parties demanded. It would mean the framework for full electrification would be put in place in 2022 at the earliest.

“This is the full impact that the Labour Party has had as a target the whole time, and shows that the proposal which the parliamentary majority has agreed on is correct,” Labour’s spokesman Terje Lien Aasland said in a press release. “The minister now appears to have understood the possibilities the proposal gives and has taken a more constructive approach.”

“Lien shows that the whole area’s power needs with electricity from shore, cables between the fields and an onshore plant can be included with clear time indications in the final licensing conditions, without the beginning of Johan Sverdrup being delayed,” Aasland said. “This is in line with our targets. I now assume that we will work constructively further with this and that the licensing conditions’ final design will take this into account.”

Labour’s traditional support base, the trade unions, had also argued against electrifying Utsira High in the first phase. They said it was essential to avoid delays in the development, which is the largest Norwegian oil project since the 1980s.

Opposition shocked
“Yes, I am surprised,” the Christian Democrats’ Kjell Ingolf Ropstad told Aftenposten. “I am surprised that Labour is now looking at phase two as the start-up phase. We must now sit down and discuss if solutions can be found that nevertheless ensure electrification in phase one.”

“The start-up phase is not necessarily from day one, but relatively early in the process, ” Ropstad said. “And clearly in phase one – definitely not in phase two.” Woodgate



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