Aker Kvaerner Wins Ormen Lange Work

Norsk Hydro has confirmed that it intends to award Aker Kvaerner the contract for front-end engineering, detail engineering, procurement and project management support for the Ormen Lange onshore gas processing plant in Norway. The contract is worth about NOK 950 million.

"The Ormen Lange contract is important for Aker Kvaerner and for the Norwegian contracting industry. We are grateful to Norsk Hydro for their trust, and are keen to prove that, with our wide-ranging international expertise and by means of close cooperation with the customer, we can deliver internationally competitive projects in Norway," says Helge Lund, Aker Kvaerner's president and chief executive officer.

On the Ormen Lange project Aker Kvaerner will combine its global broad experience in the design and construction of onshore process facilities with its concept and project execution competence in its Norwegian engineering business. The project will make use of the group's own model for the execution of large projects. This execution model is also being used on Hydro’s successful Grane project – a development which according to Hydro will come in NOK 1 billion below budget.

"Together with Norsk Hydro we will spend the next 11 months optimizing the solution for the onshore process facility for Ormen Lange," says Øystein Haukvik, Aker Kvaerner's project manager. The plant will be built on the mid Norwegian coast, at Nyhamna in the Aukra local authority in Møre og Romsdal county.

Front-end engineering starts straight away. As well as preparing the whole framework for the construction contracts for the onshore plant, Aker Kvaerner will be responsible for the procurement of equipment and materials, and will assist Hydro with onshore project management. The Ormen Lange work will continue until the plant is ready for production in October 2007. The whole work-scope is estimated at 1.2 million hours, or approximately 700 work-years.

The Ormen Lange gas field lies about 120 kilometers northwest of Kristiansund. It is to be developed with subsea production facilities in 800-1,000 meters water depth, combined with an onshore process and export plant in the Aukra local authority. In addition to these facilities, the Ormen Lange development also involves the most extensive gas export system to be built so far on the Norwegian continental shelf. Total investments are estimated at about NOK 55 billion. The field has an expected production life of between 30 and 40 years, and peak production will run at around 20 billion cubic meters a year. This corresponds to 20 per cent of Norway's expected gas production in 2010.