Norway’s Kvaerner has today signed the final contract for delivery of the steel jacket substructure for the riser platform at the Johan Sverdrup field.
Since the letter of intent for the delivery was signed in June 2014, Kvaerner has detailed out and confirmed a range of improvements to cost levels and productivity which will be implemented in the project execution. For Kvaerner, the contract signing marks a milestone for the company’s strategy to increase its competitive power.
At 26 June 2014, Kvaerner signed a frame agreement for delivery of a non-specified number of steel jacket substructures to future Statoil projects. A letter of intent for one steel jacket for the riser platform and one for the drilling platform at Johan Sverdrup was agreed simultaneously. Today’s contract value for the riser platform jacket is close to NOK 2 billion.
“When we today move from a letter of intent to a signed contract, is truly a milestone in several respects. It documents that Kvaerner over the last six months has confirmed the effect of cost reductions and our improved competitive power. Johan Sverdrup is the largest industrial projects in Norway for decades. Hence, it will provide a wide range of important contract opportunities for the entire industry for many years ahead. This is an important contribution to bridging a period when the sector experiences reduced activity level for other projects,” says Jan Arve Haugan, Kvaerner’s President & CEO.
The new contract reinforces Kvaerner’s position as the market leader for large steel jacket substructures to the North Sea region. The riser platform is scheduled to be delivered in the summer of 2017. The engineering for the new jacket has started at Kvaerner’s offices in Oslo. Kvaerner Verdal is the contract party, and the project management will be based at the company’s specialised jacket-facility in Verdal in Mid-Norway.
This is also where fabrication will be performed, and where the assembly will take place from the first quarter of 2016. At peak, 350 Kvaerner employees will work on the project. It is expected that approximately 1 000 people in various supply and service companies will also be involved.
“Today’s milestone also illustrates that this industry is well used to significant shifts in the market cycles, and that we are able to combine demand for immediate changes with long term development of the industry. It has taken several decades for Norway to build an industry which is internationally competitive. The oil and gas sector has been the main engine for delivering welfare to the society for generations. Provided that we continue to see sound frame conditions from the authorities, this industry will continue to be a key provider of both welfare and employment also to the children of those who are young today, concludes Haugan.
The parties will conduct a contract signing ceremony and press conference today at 11:00 AM at Rica Park Hotel Sandefjord.