Hydro Awards Subsea 7 Oseberg Vestflanken Contract

Hydro has awarded Subsea 7 a contract for work on the Oseberg Vestflanken and signed a letter of intent with Subsea 7 for work on the Tune Phase 2 project.

The contract comprises flowlines, umbilical and installation of a manifold on Oseberg Vestflanken.

It is an EPCI contract for the engineering, procurement, construction and installation of two nine-inch transport flowlines, an umbilical from the substructure on Oseberg Vestflanken to the Oseberg field center, and installation of a manifold at Oseberg Vestflanken.

Construction work on the flowlines will be performed by Subsea 7 at its fabrication yard in Gaupne on the west coast of Norway. Project work and procurement is to start immediately. Fabrication will be done during the coming winter, before installation at the field in late summer 2005.

The contract value is approximately NOK 260 million.

Oseberg Vestflanken is part of Oseberg Unit and will be developed as a subsea installation tied in to Oseberg field centre, approximately 9 kilometers away.

Gross recoverable reserves are 5.4 million cubic meter oil and 5.6 billion cubic meter of gas.

Tune Phase 2
The letter of intent includes flowline, umbilical and installation of a structure on the Tune Phase 2 project. Initially this will be project work, starting spring 2004.

The agreement is an EPCI contract including engineering, procurement, fabrication and installation of an eight-inch flexible flowline, an umbilical between the subsea structures on Tune and Tune Phase 2, and also installation of protection structure on the Tune Phase 2 field.

Engineering and fabrication will take place in 2004 and 2005, whereas the installation on the field will take place late summer 2005.

The agreement is pending the approval from the licence partners and the authorities before the final signing of this agreement, planned for June 2004.

Production from the Tune field started in November 2002. The gas field is located 10 kilometers from Oseberg Field Center. Phase 2 will bring recoverable gas reserves from a total of 13 to 18.8 billion cubic meters.

Both agreements have been awarded after competition with other flowline installation contractors.

Partners in Oseberg Vestflanken are Norsk Hydro as operator with 34%; Petoro with 33.6%; Statoil with 15.3%; Total E&P Norge with 10%; Mobil Development Norway AS with 4.7% and Norske ConocoPhillips with the remaining 2.4%.

Partners in the Tune License are Norsk Hydro as operator with 40%; Petoro with 40%; and Total E&P Norge wit the remaining 20%.