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Kvaerner-KBR JV Wins Johan Sverdrup Platform Contract

KBR in a joint venture with Kvaerner has signed a contract with Statoil for the complete delivery of platform topsides to the Johan Sverdrup field development. The agreement to deliver the deck for the utility and living quarter (ULQ) platform comes after a tough international competition, where Kvaerner-KBR presented the best overall bid. The agreement has an estimated total value for the Kvaerner-KBR partnership of approximately NOK 6.7 billion.

The ULQ-platform is one of four platforms to the Phase One development of the Johan Sverdrup oil and gas field on the Norwegian continental shelf. Kvaerner-KBR joint venture will execute the engineering, procurement and construction (EPC) for the ULQ topside as one complete delivery. The agreement also includes an option for commissioning assistance and offshore hook-up for the platform.

“The market has shown a strong interest in this contract, and Kvaerner and KBR have won the contract in tough international competition. So far the Norwegian supplier industry has won the main Johan Sverdrup contracts. It is good to see that Statoil and the suppliers jointly are about to break the cost curve to ensure competitive force in a tough time for the whole industry,” says Margareth Øvrum, Executive Vice-President for Technology, Projects and Drilling in Statoil.

Over the last decade, costs in the global oil and gas sector have increased significantly, to the point where oil companies and their contractors are now implementing changes aimed at sustainable cost reductions.

“This is another milestone in the industry’s ongoing improvements. The success of this process is based on close cooperation with our customers. KBR has had significant track record in all sectors of the North Sea and in particular in Norway. KBR is pleased to be working with Statoil in their exciting new development for Johan Sverdrup, and also alongside Kvaerner in a strategic partnership. KBR’s experience in designing for cost savings, ease of project execution, and safe & effective construction, emanates from its heritage in the Offshore Oil & Gas Industry. We look forward to achieving new benchmarks for such projects”, says Stuart Bradie, KBR’s President & CEO.

“As part of its mid-2014 strategic re-development, KBR has significantly reduced costs and increased productivity throughout its global businesses. The improvements include changes to its structural organization, cost base, work processes and customer focus, as well as a more effective cooperation with partners and subcontractors. The award of this new contract is attributable to those efforts. Through the preparations for the Johan Sverdrup bid, Kvaerner-KBR have established a model which leverages the compatible expertise in the joint venture. The partners will therefore continue to pursue other future prospects, through a strategic relationship”, says Stuart Bradie.

Johan Sverdrup ULQ project will be executed as a 51-49 percent joint venture between Kvaerner and KBR. Senior personnel in Kvaerner and KBR will work as one, integrated project management team (IPMT). Engineering for the topsides will be led by KBR in Leatherhead, UK, with full integration of Kvaerner engineering personnel. Procurement activities for the project will be undertaken in both Norway and in the UK.

Kvaerner-KBR’s project execution model includes a wide range of suppliers both in Norway and around the globe. Apply Leirvik at Stord in Norway will be a subcontractor for delivering the accommodation module. Fabrication of the utility module will be done by subcontractors in Poland under management of Kvaerner. Kvaerner’s specialized facility at Stord will assemble, outfit and assist in the commissioning of the topsides.

Detailed engineering will start immediately, while fabrication is expected to start spring 2016. The platform topside is scheduled to be delivered in the first quarter of 2019. At peak in 2017, a total of 1,500-2,000 people will be involved in the project execution.

“We have committed to deliver. Now we will deliver as committed. This will be hard work, but I know that all of us in KBR are today celebrating this new important win. The new Johan Sverdrup contract provides an important momentum for KBR’s next chapter of history in the North Sea”, says Stuart Bradie.

KBR’s contract value will be included in KBR’s second quarter 2015 backlog of unfilled orders for its Engineering and Construction Segment.


Source and Link:  The EPC Engineer