Equinor’s Projects Witness 3% Cost Hike This year

The Oslo-headquartered energy firm Equinor, which operates 19 projects currently under development in Norway, said that they have seen a cost increase of 3% (around $610 million) in 2024 compared with the past year.

The overall increase since the Plans for Development and Operation (PDOs) is $3.09 billion in 2024 and the currency effects accounted for $1.17 billion of this. In the proposed National Budget for 2025, Norway’s Ministry of Energy listed the status of 13 Equinor-operated projects currently under development or recently completed, the company said.

The projects in question have a total investment framework of $18.61 billion, from commencement to commissioning.

Trond Bokn, head of project development in Equinor, said that the company has a good portfolio of profitable projects being developed in the country, which will contribute to long-term security of supply of oil and gas to Europe.

“In 2023, our developments contributed to high activity and $2.35 billion to the Norwegian supplier industry. Together with our partners and the industry, we have completed six projects during the past year,” Bokn said.

If the Johan Castberg project and currency effects are omitted, the cost increase for the reported projects is around 3 percent since PDOs.

Two of the projects – Johan Castberg and Oseberg gas compression and partial electrification – have experienced a post-PDO increase of more than 20%, and were therefore mentioned specifically in the proposed national budget.

The production ship of Johan Castberg is now anchored at the field and it is on track for start-up towards the end of the year.

The cost increase in Johan Castberg project is $210 million since last year. This is due to a longer stay than estimated at Aker Solutions at Stord, currency effects and a general cost increase. Of this, almost $75.19 million is currency effects. Since the PDO, estimated costs have grown by $2.58 billion 2024-NOK. Currency effects account for 8.1 billion of this.

Oseberg Gas Phase 2

OGP is composed of partial electrification of the Oseberg Field Centre and Oseberg sør, as well as installation of a new compressor module at the field centre.

The cost increase over the past year is $110 million and the PDO, the cost increase is about $230 million in 2024. This is a result of longer delivery times for new transformers that were destroyed in a fire at Hitachi’s factory in Vaasa in 2023, as well as delays related to increased complexity. Planned commissioning has been postponed from 2026 to late 2027.

Snøhvit Future

Snøhvit Future project encompasses onshore compression and electrification of Hammerfest LNG on Melkøya. Since the PDO, the cost increase is $180 million. More than $46.99 million of this relates to currency effects.

One of the main reasons for the higher costs is the joint venture’s decision to change the design of an electric boiler as a result of safety considerations, the company added..