Construction start for Johan Castberg, a springboard for increased activity in the Barents Sea

21 November 2018 – Today, Kvaerner cuts first steel for the topside of Equinor’s Johan Castberg floating production storage and offloading (FPSO) vessel. The project is a good example of how oil companies and Norwegian suppliers can cooperate to make field developments more profitable, even in the Barents Sea where there is little prior infrastructure.

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21 November 2018 – Today, Kvaerner cuts first steel for the topside of Equinor’s Johan Castberg floating production storage and offloading (FPSO) vessel. The project is a good example of how oil companies and Norwegian suppliers can cooperate to make field developments more profitable, even in the Barents Sea where there is little prior infrastructure.

In many ways Johan Castberg represents the oil industry’s springboard to the rest of the Barents Sea, because the project demonstrates that field developments far north on the Norwegian continental shelf can be very profitable. This will open up major opportunities in Norway’s northernmost marine area, and for Norwegian industry. 

“Additionally, Johan Castberg is an important project for Kvaerner and the Norwegian supplier industry because it enables us to further develop our expertise in constructing floating production vessels, which is expected to be the preferred platform type for future developments in the Barents Sea. As such, you could say that Equinor’s Johan Castberg is a valuable springboard for future development requirements in the Barents Sea, which will be a very important region for Kvaerner with regards to future activity at our Norwegian facilities,” says Karl-Petter Løken, CEO of Kværner.

Generates work for 4,800 people

In February this year, Kvaerner signed a contract with Equinor for fabrication of the topside modules for the Johan Castberg FPSO, plus hook-up and integration of the topside modules with the hull. The majority of the modules will be delivered by Norwegian yards. Kvaerner's facility at Stord will fabricate the modules for gas injection, for the re-compressor and for separation, while the company's facility in Verdal will fabricate the module for seawater handling and the main pipe rack. As subcontractor to Kvaerner, Aker Solutions' yards in Egersund and Sandnessjøen will, respectively, deliver two modules as well as a module and the FPSO’s flare boom. 

Kvaerner's scope for the FPSO will at peak involve around 2,000 Kvaerner employees and subcontractor personnel. Including ripple effects for subcontractors, service providers and others, the contract is expected to generate work for approximately 4,800 people. The FPSO hull, including living quarter, will be delivered to Kvaerner's facility at Stord in the autumn of 2020.

Investing for future Barents Sea developments

To further improve the productivity for assembly and completion of projects such as the Johan Castberg FPSO, Kvaerner has initiated a development of the quayside at the group's specialised yard at Stord. The expansion, which is an investment of NOK 370 million, includes a new deep-water quay and an extension of the crane lane for Northern-Europe’s largest crane, which Kvaerner has at Stord. This will make it possible to build the Johan Castberg FPSO even safer and faster, which will make Kvaerner well positioned for future projects.

“This investment will improve Kvaerner’s competitiveness for project execution in general, but especially also for fabrication and assembly of floating platforms such as FPSOs.  We believe this will be the preferred platform solutions in several locations, including the Barents Sea. We can develop and create thousands of jobs across the country when we have a competitive edge on such projects,” says Løken.

Construction begins when the Minister of Petroleum and Energy together with Kvaerner’s apprentices cut the first steel plate on Wednesday 21 November at 12:05pm.

Minister of Petroleum and Energy, Kjell-Børge Freiberg, will be present at the construction start. He will, together with Kvaerner’s apprentices, start the digital system for automated cutting of the first steel plate that will become part of the topside process system on board the FPSO. The representative for Equinor’s management, Knut Gjertsen will be present, together with Kvaerner’s CEO Karl-Petter Løken; Kvaerner’s project director Heine Haktorsen; Steinar Røgenes, director of Kvaerner’s facility at Stord; and Elly Bjerknes, executive vice president of Process Solutions in Kvaerner.

ENDS

For further information, please contact:

Media:

Odd Naustdal, Head of communications West Norway, Kvaerner, Tel: +47 905 76 079, email: odd.naustdal@kvaerner.com

 

Investors:

Torbjørn Andersen, VP Investor Relations & Communications, Kvaerner, Tel: +47 928 85 542, email: torbjorn.andersen@kvaerner.com