Equinor ASA EQNR, a Norwegian integrated energy firm, announced that it has authorized, with its partners, an investment of more than $410 million (approximately 4 billion NOK) for a new subsea project at the Troll field in the Norwegian North Sea. EQNR is a major natural gas supplier to Europe, and the Troll field is one of its largest natural gas-producing fields. The subsea development project is expected to increase gas production from the field, supporting higher gas exports and strengthening Europe's energy security.
Expansion to Boost Troll Field Production
The TWIN project, also known as the Troll West Increased gas recovery North, is expected to increase gas production from the field by about 11 billion standard cubic meters. A company spokesperson added that the expansion will boost gas production in Norway by nearly 2-2.5 million cubic meters per day during the first eight years of operation.
EQNR Relies on Existing Infrastructure to Lower Development Costs
The project involves drilling two new wells tied back to the existing Troll field infrastructure through a subsea template, a large structure that supports and organizes multiple wells and the associated equipment on the seabed, and a pipeline that will help transport hydrocarbons from the wells to the subsea facilities. Additionally, the field’s umbilicals and monoethylene glycol system will be extended to support the new subsea development and ensure reliable gas production from the wells. The TWIN project represents the third stage of the Troll Phase 3.
Equinor has highlighted that by leveraging existing infrastructure and standardized project solutions, rather than constructing new offshore platforms, it expects to reduce capital spending and the costs associated with bringing the new subsea development online. This approach also allows the company to reduce development timelines and start producing sooner. The company targets bringing the subsea development online by 2028.
The latest subsea project follows an earlier stage of the Troll Phase 3, which is expected to start production in 2026. The earlier project was aimed at maintaining strong gas production levels from the Troll A Platform and the Kollsnes Gas Processing Plant through the end of this decade.
Equinor Targets More Subsea Developments as Fields Mature
Equinor has noted that many of its fields on the Norwegian Continental Shelf (“NCS”) have been producing for a long time and are in the mature stages. The newer discoveries on the shelf are smaller and are associated with increasing development costs. For smaller fields, cost control becomes increasingly important, as they might otherwise be economically challenging to develop. A company spokesperson has, however, stated that the company’s target is to reduce development costs and the associated development time of these subsea projects by half. In addition, EQNR plans to develop six to eight subsea projects per year by 2035. This approach demonstrates Equinor’s commitment to offsetting natural production declines from aging fields and maintaining production levels on the NCS.
Equinor is the operator of the Troll field with a 30.55% stake. The other partners in the field include Petoro AS with a 55.93% stake, Shell with a 8.19% interest, TotalEnergies holding 3.69% and ConocoPhillips holding 1.64%.
EQNR’s Zacks Rank and Key Picks
EQNR currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the energy sector are W&T Offshore WTI, Valero Energy VLO and FuelCell Energy FCEL, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
W&T Offshore benefits from its prolific Gulf of America assets, which offer low decline rates, strong permeability and significant untapped reserves. The company’s recent acquisition of six shallow-water fields in the Gulf of America boosts its future production prospects and is expected to enhance its revenues.
Valero Energy is a leading refining player with a robust network of 14 refineries across the United States, Canada and Peru. The company has a combined high-complexity throughput capacity of 3 million barrels per day, which distinguishes it from other independent refiners. Valero’s refineries have a combined Nelson Complexity Index of 11.5, which implies that they can process a wide variety of feedstock, convert it into higher-value products and shift product yields according to market conditions.
FuelCell Energy is a clean energy company that offers scalable, reliable, low-carbon power solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company’s proprietary molten carbonate fuel cell systems generate electricity through an electrochemical process instead of burning fuel, reducing carbon emissions and minimizing the environmental impact of power generation. FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.
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