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Avoided a one-year delay through unique cooperation

Thanks to close cooperation and a flexible supplier agreement, Lundin Norway has avoided what could have turned into a one-year delay for the Luno II development.

Last year, Lundin entered into a unique agreement with TechnipFMC on maturing fields in the North Sea for tie-in to the Edvard Grieg platform.

Lundin specialists have basically taken up residence at TechnipFMC, working with their expert staff as a single, unified team. Luno II is the first project under this agreement, which has already proven to give the desired benefit.

“We involve the supplier at a very early stage and we try to share most all of the information we have so that all issues are on the table from the beginning, instead of surprises later on,” says Kristin Færøvik, Managing Director in Lundin Norway.

Work in the early stages has traditionally been set up as an order from the operator to the supplier company, but in this case, both have worked together to mature the concept, thus retaining flexibility in the project.

Last week, we awarded TechnipFMC the contract for design, procurement, fabrication and installation in connection with development of the Luno II field, which will be tied in to the Edvard Grieg platform. This would not have been possible with a traditional contract form in an early phase.

Changed concept with no delay
I guess you could say we ended up with a bit of a high-class problem when we drilled an appraisal well on Luno II last year. The appraisal well yielded significantly better results than expected, which meant that we had to make some major changes in the development concept. For example, we had to change the placement of all the wells.

“This really showed the benefit of the particular type of contract we had with TechnipFMC. It gave us the necessary flexibility to make these changes without losing time,” says Kristin Færøvik.

Without this flexibility, the project would have faced several challenges.

“First of all, it would have been practically impossible to award a topside modification contract for Edvard Grieg if we did not have a clear project for tie-in. The modification contract went to Rosenberg WorleyParsons in October last year. Then there would be delays in the Luno II project with new and different requirement specifications from the operator,” says Færøvik.

TechnipFMC agrees that there are substantial time savings.

“Without an agreement like this, new tender processes would have led to postponing the project. That would have been costly for both supplier and oil company,” said Arild Selvig, Director Sales and Marketing for Norway in TechnipFMC to E24 in connection with the contract signing.

“Lundin has given us functional requirements instead of issuing specific equipment requirements, and they allow us to suggest solutions and technology. Throughout all my many years in the industry, this is the first time I have seen that we are able to realise so much of the potential for improvements,” said Selvig to the paper.