The Norwegian firm and its partners said in December 2022 that they would invest 13.2 billion Norwegian krone ($1.3 billion) to upgrade the facility.
The project includes onshore compression and electrification of the Hammerfest LNG terminal.
However, Equinor announced last year that, since the PDO (plan for development and operation) the costs “increased 1.9 billion 2024-NOK.”
More than 500 million Norwegian krone of this relates to currency effects.
2029
Equinor said in a statement on Tuesday that the project had been postponed compared to the original plan and cost estimates have increased by approximately 4 billion Norwegian krone ($396.6 million) since 2024.
“Snohvit Future is about halfway completed. It is demanding to execute such a large project in an operating plant. In addition, there has been an extensive turnaround at Melkoya this year, and we underestimated the complexity of planning and executing the project under these circumstances,” Trond Bokn, Equinor’s senior vice president for project development, said.
“We also had temporary safety shutdowns that have affected progress,” says Trond Bokn, Equinor’s senior vice president for project development,” he said.
Onshore compression is now expected to start in 2029, one year after the original plan.
Every autumn, the status of development projects that have submitted a plan for development and operation (PDO) is reported in the national budget.
“Cost estimates for the Snohvit Future project were not ready for this year’s reporting, but it was communicated that investments would increase,” the company said.
The cost estimate for the project is now more than 20 billion Norwegian krone ($1.98 billion).
When the PDO was submitted to the authorities in 2022, the original cost estimate was 13.2 billion Norwegian krone.
Adjusted for inflation, this corresponds to 14.7 billion Norwegian krone, Equinor said.
Other factors
Equinor said that other factors that have affected the progress and thus the cost development of the project over the past year include the weather in the winter of 2024/2025, which was “worse than normal, limiting work in certain areas of the plant.”
Other factors also include increased engineering costs due to more complex integration into existing facilities, and the turnaround in the summer of 2025 was extended, which postponed the resumption of project work on Melkoya.
Equinor also noted that high inflation has led to a “significant” increase in costs for the acquisition of equipment.
Hammerfest LNG liquefies natural gas coming from the Snohvit field in the Barents Sea.
Gas reaches Hammerfest LNG via a 160-kilometer gas pipeline which became operational in the autumn of 2007.
Equinor is the operator of both the Snohvit field and Hammerfest LNG with a 36.8 percent stake.
Other license owners of Snohvit are Petoro (30 percent), TotalEnergies EP Norge (18.4 percent), Var Energy (12 percent), and Harbour Energy Norge (2.81 percent).
