Equinor gets “green light” to electrify Western Europe’s biggest LNG facility

(Bloomberg) – The Norwegian government has given Equinor ASA the green light to electrify its liquefied natural gas (LNG) facility in northern Norway, a project forecast to lower emissions and lock in gas deliveries beyond 2030.

“We are putting in place the policies so Hammerfest LNG can continue operating to 2040,” Prime Minister Jonas Gahr Store said at a press conference in Hammerfest Tuesday. Connecting the Arctic facility to the grid is the “largest, single climate measure decided by a Norwegian government,” he said.

The Melkoya plant, which opened in 2007, processes natural gas from the Snohvit field in the Barents Sea, producing some 6.5 Bcmg a year, or about 5% of Norway’s total exports of the fuel.

Equinor submitted plans at the end of 2022 to build an onshore compressor, electric steam boilers, two transformer stations and the necessary grid connections to fully electrify the facility, with an estimated cost of 13.2 billion kroner ($1.3 billion).

Replacing on-site gas turbine generators with power from shore will slash carbon dioxide emissions from the facility by 850,000 tons annually after its planned completion, equal to 13% of the 55% cut in carbon emissions pledged by Norway’s oil and gas sector, according to Equinor.

Onshore compression, meanwhile, is needed to extend plateaued production from the Snohvit field - the first to be developed in the Barents - as reserves dwindle. New 420 and 132 kilowatt cables will power the facility and bolster grid capacity in Hammerfest, the government said in a statement.

The government also aims to increase renewable energy production in Finnmark by at least as much as the energy consumed by Hammerfest LNG, about 360 megawatts, by 2030. Options for bolstering generation include onshore and offshore wind, as well as upgrading the hydroelectric power plant in Alta. Today, almost all of the region’s energy comes from hydropower.

“We want development and growth throughout Norway,” Finance Minister Trygve Slagsvold Vedum said Tuesday. “Getting more power and better availability of electricity in this area is also an important part of overall preparedness and our national security.”

Equinor has been given until the end of the decade to phase out the use of gas turbine generators at the facility and may be allowed to use them for back-up power as late as 2033, pending government approval. Onshore compression can begin as early as 2028, the company said Tuesday.