Offshore Technology

Daily Newsletter

09 August 2023

Daily Newsletter

Equinor secures approval for $1.3bn Snøhvit Future project

The approval secures the future operation of the Snøhvit field and the Hammerfest LNG plant on the island of Melkøya.

Equinor and its partners have secured approval from the Norwegian Government for the Nkr13.2bn ($1.29bn) Snøhvit Future project.

The approval, which is subject to certain conditions, secures the future operation of Snøhvit natural gas field in the Norwegian Sea and the Hammerfest liquefied natural gas (LNG) plant on the island of Melkøya.

Commissioned in 2007, the Hammerfest LNG plant contributes 5% of the country’s total gas exports.

Equinor projects, drilling and procurement executive vice-president Geir Tungesvik said: “The Snøhvit owners are pleased that the government has now approved Snøhvit Future, a project that will strengthen Norway’s position as a reliable, long-term supplier of gas produced with very low greenhouse gas emissions.

“The project ensures long-term operation and export from Melkøya towards 2050. We fully understand that there have been many factors to consider, and we will recommend the partnership to meet the conditions for the authorities’ approval.”

The approval allows the company and its partners to implement onshore compression from 2028 and electrification of the LNG plant from 2030.

Electrification of the Hammerfest LNG plant is expected to replace the existing gas turbines with power drawn from the grid. As a result, CO² emissions from the LNG facility are expected to cut by nearly 850,000 tonnes annually.

Equinor said that the implementation of onshore gas compression will ensure sufficient flow from the reservoir to enable plateau gas production for export from the Hammerfest LNG facility beyond 2030.

Equinor Energy owns a 36.79% stake in the Snøhvit licence while other partners include Petoro (30%), TotalEnergies EP Norge (18.40%), Neptune Energy Norge (12%) and Wintershall Dea Norge (2.81%).

ESG 2.0 marks a shift towards stricter environmental rules

ESG is moving into a different era, which we call ESG 2.0. While ESG 1.0 was driven by voluntary corporate action, spurred by pressure from activist consumers and investors, ESG 2.0 is being driven by a new wave of government policies. The EU has taken the regulatory lead, with rules introduced or in the pipeline that will price emissions, regulate the use of the terms ‘ESG’ and ‘sustainability’ in marketing materials, and make ESG reporting mandatory. The US has taken a different approach, favoring less regulation and more financial support in the form of tax breaks for clean industry (renewables plus nuclear and hydrogen). China is planning to expand its emissions trading system to more sectors, decarbonize its heavy industry, and ramp up its use of renewables. The new policy direction is mainly motivated by the ambition to hit net zero emissions targets. But on top of this, governments are now competing for clean industry and trying to challenge China’s leadership on the production of the world’s green technologies such as solar panels and batteries, as well as the production and refinement of materials needed for energy transition such as lithium. These driving forces are leading to policy that will impact every sector, not just heavy industry, and will keep ESG near the top of the regulatory agenda over the longer term.