Snohvit LNG Export Terminal, Melkoya Island, Hammerfest, Norway

The Snohvit LNG project was constructed to exploit the resources of three gas fields in the Barent Sea; Snohvit, Albatross and Askeladd (240m to 345m deep), which lie about 140km northwest of Hammerfest in Norway.

These fields, which were first discovered in the 1980s, have estimated reserves of 300 billion m³ of LNG and 20 million m³ of condensate. The gas production system is one of the first in Europe to use a subsea production platform, which will feed gas via 160km of pipeline to a new processing plant on Melkoya Island near Hammerfest.

The project was being led by Statoil as part of a consortium of eight companies. The consortium consists of Statoil (22.9%), Petoro (30%), TotalFinalElf (18.4%), Gaz de France (12%), Norsk Hydro (10%), Amerada Hess (3.26%), RWE-DEA (2.81%) and Svenska Petroleum (1.24%). The LNG processing project has required finance of more than $5.3 billion (NOK51.3 billion); part of the finance was provided by the Japanese Bank of International Commerce (JBIC).

The project was authorised by the Norwegian Parliament in 2002 (subject to some clarification of the terms of distribution of revenues and taxes) and construction on the project began in late 2003. The facility came on-stream in August 2007 and will now be used over the next 25 years.

Production capacity

The production capacity of the new single train facility is 4.3 million t/yr (equivalent to approximately 5.6 billion m³ of LNG). Supply contracts have been agreed to date with customers in East Coast US (El Paso) and Spain (Iberdrola) accounting for 4 million t/yr of the capacity (the remaining capacity and any future expansion will go to Gaz de France).

The unprocessed gas arriving at the LNG processing facility will contain between 5% and 8% carbon dioxide; this is separated out at the processing and liquefaction facility and returned via a separate 160km pipeline for storage/sequestration beneath the seabed (2,600m below the sea bed on the edge of the reservoir in the 45m to 75m thick Tubasen sandstone formation) thus preventing undue pollution and allowing Norway to adhere to the Kyoto treaty.

The energy efficiency of the liquefaction facility is 70% which is the best yet achieved in any plant of this kind across the world (the compressor operates with an efficiency of 230kWh per ton of LNG).

Contractors and construction

The management, engineering, procurement and construction contract (€380 million) was awarded to Linde AG for the provision of key equipment for the LNG terminal. Linde uses MFC liquefaction technology developed jointly by themselves and Statoil (Air Products and Philips are also to contribute technology to the liquefaction train).

The instrumentation for the facility was supplied by Parker Instrumentation. Aker Kvaerner was awarded a contract in early 2005 (worth an estimated NOK1 billion) for important completion work at the LNG facility at Melkoya Island.

This contract involved Aker Kvaerner Elektro (for electrical and instrumentation installation), Kaefer IKM for scaffolding, insulation and surface treatment and Aker Stord for management of this section of the project which involved installation and integration of the liquefaction/process equipment into the island infrastructure.

Aker Stord was awarded the main hook-up and installation contract on Melkoya Island in 2003 and was awarded the contract for preparing the infrastructure and equipment on the island. Aker Kvaerner had over 800 personnel working on the island over the first half of 2006 so that the project could be completed on schedule.

Liquefication / process barge

The heart of the LNG facility, the liquefaction plant, is borne and operated on a gas liquefaction barge, which was constructed at the Spanish shipyard group Izar Construcciones Naval (Dragados yard) in Cadiz. The barge construction contract was worth an estimated NOK170 million.

The process barge measures 9m H × 154m L × 54m W. This process barge approach was chosen as it greatly reduces the need for steelwork on Melkøya Island, necessitates a compact efficient design, allows prefabrication of modular components off-site in a convenient dry-dock situation and, most importantly, gives cost savings as well as higher productivity compared with constructing the plant on-site.

Following completion of the barge in May 2005 it was towed to an outfitting yard where 24,000t of process equipment for the gas liquefaction plant was installed on the deck. The barge was then transported to Melkøya Island in July 2005 on a heavy-lift vessel and installed in a custom built dock. The completion work for the barge on the island was completed by the end of August 2006.

Instrumentation components and sub-systems

Parker Instrumentation supplied all of the instrumentation components and sub-systems for the Snohvit LNG project. They provided over 1,000 H-series manifolds, 20km of conventional and heat race tubing and many thousand twin-ferrule A-LOK compression tube fittings.

The components were supplied fabricated in 316 stainless steel and, for areas where corrosion is a major problem (sea water cooling systems), in 6Mo (6% Molybdenum steel). Parker also used their Supracase process to harden the ferrules of the fittings and avoid the affects of corrosion. The instrument enclosures provided by Parker are weather proof and equipped with antifreeze systems to allow them to operate at temperatures below -25°C.

LNG, condensate and LNG exports

The consortium will need four 145,000m³-capacity carriers to deliver the LNG to receiving terminals in the US and southern ports of Europe (investment for these new ships has approached NOK5.4 billion). The Arctic Princess (launched in April 2007) delivered the first 145,000 m³ LNG cargo from Snohvit to southern Europe in October 2007. The Arctic Discoverer docked at the Cove Point gas import terminal in the state of Maryland, south of Washington DC, after a 12 day voyage across the Atlantic in July 2008.

It is estimated that there will be 70 cargos of LNG per year shipped out from the Melkøya facility. The annual exports are anticipated to be 5.75 billion m³ of LNG, 747,000t of condensate and 247,000t of Liquefied Petroleum Gases (LPG).

The total investment has included NOK34.2 billion for field development, pipeline and land plant and NOK5.4 billion for ships.

Construction of the LNG tanks

The Snohvit project required the construction of two LNG tanks, one condensate tank and one LPG tank at the gas processing complex on Melkøya Island. The respective tanks have the following capacities and dimensions:

• Two LNG tanks 125,000m³, diameter 74m, height 48.70m
• One condensate tank 75,000m³, diameter 60m, height 42.30m
• One LPG tank 45,000m³, diameter 50m, height 37.90m

DYWIDAG Systems International (DSI) was responsible for the supply and installation with stressing and grouting of a total of 1,650t horizontal and vertical DYWIDAG post-tensioning tendons with accessories in the construction of the tanks to allow them to withstand the extreme conditions.

The weather conditions during the construction were of an extreme arctic nature. The tank walls were constructed by means of a slip formwork with a performance of 2m/24h within a few weeks.

A particular challenge was the installation of the vertical tendons with 12 strands. The vertical tendons of the tanks are typical U-shaped or loop tendons. A loop tendon consists of two vertical tendons, which are connected at their bottom ends in the foundation by a 180° arc. In spite of a maximum tank wall-height of 40m and an arc radius of only 1m the installation of the loop tendons by pushing single strands was carried out without any problems.

Gas pipeline

In April 2005 the Solitaire laybarge started laying the 143km pipeline from the western side of Melkøya. The vessel has continued towards the Snøhvit field at a rate of 3km to 6km per day. Laying the main pipeline was completed in mid-2005.

On board the Solitaire, 12.2m-long sections of pipe are welded together in a continuous process. The sections are fed out through an opening in the stern of the laybarge, ensuring that the main pipeline is curved correctly during the laying.

The Solitaire was supplied with new pipe by three pipe transport boats which provide a shuttle service between the laybarge and the pipe storage area at Polarbase outside Hammerfest.

The 28 in-diameter line pipe is made of steel with an outer coating of reinforced concrete. Each pipe section weighs between 8t and 10t, with a total of 11,000 sections making up the main line.

Additional shipping

'K' Line (Kawasaki, Kisen, Kaisha Ltd) was taken on as the partner of Statoil ASA in the Snohvit LNG Coastal Transportation Project. In turn 'K' Line selected OSM Ship Management AS to be their Norwegian project partner.

The project involved the delivery of LNG from the Snohvit LNG Plant to the coastal cities in Norway and its neighbour countries by small LNG vessels (this accounts for the remainder of the capacity of the LNG facility). The parties have worked with LNG Norge (a subsidiary of Statoil). The idea was then developed into a long-term charter for two 140,000 cbm (Moss-Rosenberg tank type) LNG carriers worth NOK3 billion ($337.2 million).

'K' Line is, together with Statoil, the owner/operator of the vessels, which were delivered in April 2007. The vessels will be engaged in domestic transportation first, but may expand their activity to ports in neighbouring countries.

In 2004 the Snohvit partners also signed a deal with Leif Hoegh and Co and Misui OSK lines for one vessel to serve the project during a 20 year charter. The ship was built at Mitsubishi Heavy Industries and was delivered in late 2006. In addition TotalFinaElf and Gaz de France have commissioned their own vessels to transport their share of the gas.

Problems

The Snohvit LNG plant at Melkoya has had a troubled start-up period that has seen it shut down four times since it came on stream in August 2007. StatoilHydro have now announced that the project is unlikely to reach full capacity until 2009 because parts of the onshore plant cooling system need to be modified or redesigned. A closure on 7 November 2007 was caused by a sea-water leak in a heat exchanger in the cooling system of the Melkoya liquefaction plant. The plant then resumed production in mid-January but was then closed again in March 2008 for cooling system difficulties and was reopened in July 2008. The plant is only operating at 60% capacity.