Aker backs out of $2.75bn Barents consortium

Norwegian firm cites lack of commercial viability as Gazprom delays

The Shotkman gas field is one of the largest in the world, located in the the central part of Russian sector of the Barents Sea. GETTY IMAGES
The Shotkman gas field is one of the largest in the world, located in the the central part of Russian sector of the Barents Sea. GETTY IMAGES

OIlfield services firm Aker Solutions has withdrawn from from a consortium that is planning to give a tender for the Shotkman project’s floating production unit.

The Shotkman gas field is one of the largest in the world, located in the the central part of Russian sector of the Barents Sea, 600 kilometres north of Kola Peninsula.

Aker Solutions was part of a consortium with Technip, SBM Offshore and Daewoo Shipbuilding & Marine Engineering. The group plans to compete for an $2.75 billion EPIC contract for a floating production unit for the first development phase of the Shtokman field.

Aker Solutions’ daughter company Aker Kværner had just completed the initial planning of a new production unit but will not continue the work by delivering a tender for the Shtokman contract, according to Teknisk Ukeblad of the Barents Observer.

"Before we put in a tender for a project, we always evaluate the commercial promise of the project and consider each project up against other possibilities", Aker director of information in Kværner, Mariken Holter, said, "We did that also in this case, and have concluded that we will not put in a tender for the contract".

Holter did not comment on whether the remaining consortium partners intend to carry on with a bid.

The news follows reports that Gazprom has applied to the Russian authorities for permission to postpone the launch date for development of the field by one to two years to 2017-18, according to the Barents Observer reported.

Consortium operating partners Gazprom, Total and Statoil originally set 2016 as the deadline for gas exports, with LNG exporting to commence in 2017.

The delay may be in reaction to disappointing economic data from key importing countries, who have seen energy demand soften in recent months. In addition, there are major technological challenges involved in accessing the 3.8 trillion cubic metres of Shotkman gas reserves.

A final investment decision on whether to move ahead with the first phase of the development is due to be made by the trio in December.

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