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Onshore contract for Aker Kvaerner

Statoil has issued a letter of intent to Aker Kvaerner's yard Aker Stord for a large programme of installation work at the gas terminal Kaarstoe in Norway.

Statoil has issued a letter of intent to Aker Kvaerner's yard Aker Stord for a large programme of installation work at the gas terminal Kaarstoe in Norway.

This will prepare the facility to receive gas from the Kristin field starting in 2005.

The contract which has an overall value of more than NOK 700 million, has been awarded on behalf of the Gassco operating company. The job will provide work for some 500 employees over a period of 15 months.

According to a company statement, the Kaarstoe contract is a breakthrough for Aker Stord where land-based process facilities are concerned. The company already has almost 30 years' experience in the construction of fixed and floating offshore process facilities in the form of production platforms.

Aker Stord will assemble at its own yard a series of pipe-racks and equipment units for delivery to the Kaarstoe facility. These units will weigh between 35 and 450 tonnes.

For the company to deliver pipe-racks and equipment units to Kaarstoe is an important development. Previously the owners of Norwegian land-based plants have for the most part purchased these products from foreign suppliers.

"Aker Stord has been awarded the contract against strong competition from Norwegian and foreign suppliers," says Statoil's project manager Knut Magne Vaagen.

"It is gratifying that the Norwegian supply industry has shown itself to be competitive and that Aker Stord submitted the best overall bid."

"The fact that Aker Stord has now demonstrated its competitiveness in the onshore market is strategically important, and very satisfying for us," says Aker Stord's president Stian Vemmestad.

"This is something all the employees have contributed to, for example through cost reductions and greater efficiency."

The company starts mobilisation at Kaarstoe in September and installation work there will begin in January 2004.

Known as KEP (Kaarstoe Expansion Project) 2005, this stage of development at Kaarstoe has a total cost framework of NOK 5.74 billion. It will enable the plant to receive and process rich gas from Statoil's Kristin field in the Norwegian Sea when production begins on 1 October 2005. The construction of a semi-submersible gas production platform for Kristin is well under way at Aker Stord. The platform will be ready for tow-out at the end of March 2005.

The Kaarstoe facility is the largest of its kind in Europe and the third largest in the world.