Aker BP has tapped Aker Solutions and Subsea 7 to deliver and install subsea infrastructure for the second phase of the Ærfugl development offshore Norway.

The Aker BP operated Ærfugl development is a subsea project being developed in two phases, both tied into the existing floating production, storage and offloading (FPSO) on the Skarv field, which is located in the Norwegian Sea, about 210 kilometers offshore Sandnessjøen.

Aker BP, which together with partners Equinor, Wintershall DEA and PGNiG approved the final investment decision (FID) for Ærfugl phase 2 in early November, aims to start production from the first phase 2 well as early as in first half of 2020 -- notably, before the start-up of Ærfugl phase 1.

Aker Solutions, which reported its phase 2 contract to be valued at about NOK 700 million ($77 million), said it will deliver the subsea production system, including wellheads, vertical subsea trees, satellite structures, Vectus control systems, a tie-in module and about 30 kilometers of umbilicals.

Subsea 7 said its electrically heat traced flowline (EHTF) technology will be used for the 13.5-kilometer tieback from the subsea location to the existing Skarv infrastructure. The company said its portion of the deal is worth between $50 million and $150 million.

Both firms also delivered for the first phase of the Ærfugl development, as part of the companies’ subsea alliance with Aker BP.

"The subsea alliance between Aker Solutions, Subsea 7 and Aker BP has already demonstrated great value through a series of subsea project deliveries. Close cooperation between the parties is instrumental in making both phase one and two of the Ærfugl project a success," said Egil Bøyum, executive vice president, greenfield projects, at Aker Solutions.

Aker Solutions said its phase 2 work will start immediately from facilities in Norway, the UK, India, Malaysia and Brazil, with subsea structures scheduled for delivery in 2020.

Project management and engineering will also commence immediately at Subsea 7’s offices in Stavanger, Norway. Fabrication of the EHTF system will take place at Subsea 7’s spoolbase at Vigra, Norway with offshore operations taking place during 2020 and 2021.

Monica Th. Bjørkmann, Vice President Subsea 7 Norway said, “This award acknowledges Subsea 7 as a key partner in the delivery of pioneering technology, underlining our proven track record of safe and successful project execution in some of the harshest offshore environments. Electrically heated traced flowlines have been developed by Subsea 7, in collaboration with InterPipe, to deliver leading insulation performance and enable cost-effective long-distance tiebacks.”

The Ærfugl reservoir is mainly a gas reservoir that extends over 60 kilometers and is 2-3 kilometers wide. The project holds a total of around 300 million barrels of oil equivalent, and the field design includes capacity to accommodate future tiebacks in the area.

Aker BP said total investment costs for the Ærfugl project are around NOK 8 billion ($880 million). The total ‘life of field’ project has a break-even-price of around $15 per barrel (converted from gas), making the development one of the most profitable on the Norwegian continental shelf.