Dong cancels Hejre platform order. Stops field development

Danish energy giant Dong Energy, developing the Hejre oil field offshore Denmark, has terminated the contract it had for the engineering and procurement of the platform for the field.

In a statement on Tuesday, the company said the termination was a result of Daewoo and Technip consortium’s failure to meet contractual obligations.

According to Dong, which is developing the Hejre field in joint venture with Bayerngas, the project, originally scheduled for production in 2017, has faced significant delays due to issues with Technip and Daewoo.

The duo was awarded the contract that covers engineering, procurement, fabrication, hook-up, and commissioning assistance for a fixed wellhead and process platform and associated facilities on the Hejre field in February 2012.

In response to delays, Dong Energy and Bayerngas have stopped the project, while exploring alternative development options.

“Dong Energy and Bayerngas no longer have confidence in the supplier consortium’s ability to deliver the platform and hold the consortium in material breach of its contractual obligations. On this basis, DONG Energy and Bayerngas Norge have today given notice to terminate the EPC contract with the supplier consortium for cause with immediate effect. This means that the platform will not be completed and that the Hejre project in its current form will be stopped,” Dong Energy said in a statement.

Dong Energy also said that, due to the field development having been stopped, and alternative ways for development being explored, no first oil production date for the Hejre field can be provided at present.

Hejre Field is located in the central part of the North Sea near the Danish/Norwegian border. The development of the Hejre field comprised installation of a new production platform, including accommodation, wellhead and processing modules, five new production wells and separate pipelines for the oil and gas.

Dong Energy is the operator and has a 60 per cent stake in the field, and Bayerngas owns 40 per cent.

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