Statoil Springs Surprise with Njord Future Call
Friday 20 January 2017
Statoil and its partners in the Nkr13.3 billion ($1.6 billion) Njord Future project off Norway have made a surprise decision to revamp the field’s existing floating storage unit instead of going for a newbuild or leased vessel to extend field life to 2040.
It is understood that the Norwegian state-controlled player made a choice to reuse the Njord B vessel after concluding that commercial bids submitted in November by companies offering newbuild and leased solutions were too expensive.
A Statoil spokesman said the decision was made late last month.
“Before Christmas, the licence holders decided to go for renovation of the existing Njord B FSU. The options for new buildings and leases have been shelved,” he said.Daewoo Shipbuilding & Marine Engineering, Samsung Heavy Industries, Modec, Teekay Offshore Partners and Knutsen are believed to be among the contractors disappointed about the Njord partners’ decision.
One project watcher questioned whether all Statoil’s partners were comfortable going down the revamp route.
“One of them is not happy,” claimed the source, but declined to say which one.
The remaining partners in Njord are VNG, Engie, Faroe Petroleum and Dea.
Until a final investment decision has been made in the second quarter of 2017 on the Njord Future project itself, Statoil’s FSU decision will not be set in stone.
“The (FSU) is part of the Njord Future project, where a final investment decision is due this spring,” said Statoil’s spokesman.
He added that it is “too early” to discuss the status of contracts and workscopes related to renovating Njord B, which was towed to Kristiansand last year for inspection, maintenance and equipment preservation activities.
The Aframax-sized Njord B FSU, which has a design life of 20 years, was towed to shore after 19 years on location.
Statoil’s decision to ditch a newbuild FSU solution could turn out to be short-sighted, claimed a project watcher who previously questioned whether a 20-year old vessel can operate safely in such harsh waters for a further 20 years, even after being refurbished.
“It’s not realistic to think that a tanker will last for 40 years, at least not in North Sea conditions,” he said.
However, another source said that, when Statoil inspected the FSU last year, “its condition was found to be better than expected”, which is perhaps related to the vessel being brought to shore in 2012 for upgrade work.
Statoil’s aim is to have an FSU on location by mid-2020 in time to handle production from the Njord Alpha production semi-submersible, which is being revamped by Kvaerner in Norway.
There have been suggestions that this schedule is conservative and that the vessel could be on location a year earlier, depending on how Kvaerner progresses with its refurbishment of Njord Alpha.
Total production from Njord Future could be more than 80,000 barrels of oil equivalent per day.