Alvheim North Sea Northern, Norway

Alvheim lies on the Norwegian Continental Shelf, west of Heimdal, in production license PL 203. The field is operated by Marathon Oil Corporation (65%) oh behalf of ConocoPhillips (20%) and Lundin Petroleum (15%).

The field was discovered in 1998 and well 24/6-2 drilled to test the hydrocarbon potential of the A2 North Heimdal T60 sand prospect within the Lista Formation in the northern part of the license acreage in block 24/6. It was drilled with the semi-submersible rig Transocean Leader and reached a total depth of 2,722m in the Paleocene Våle formation. The gas zone extended from the top of the reservoir at 2,099m and down to the oil-gas contact at 2,151m (52m gross) and the oil extended down to the oil-water contact at 2,168m.

One drill stem test flowed at 550m³/day oil and 44,000m³/day gas through a 48in/64in choke. Oil density was measured as 0.855g/cc. Gas gravity was 0.690g/cc and the GOR was 80m³/m³.

The project will initially consist of developing the Kneler, Kameleon and Boa discoveries and the previously undeveloped East Kameleon accumulation. The Alvheim group reached an agreement with Norsk Hydro to tie-in the nearby Vilje discovery (formerly known as Klegg). Additionally, the recent Hamsun discovery may be a potential tie-back to Alvheim.

Alvheim alone contains recoverable reserves of approximately 180 million gross barrels of oil equivalent. Production from a combined Alvheim / Vilje development is expected to ramp up to more than 50,000 barrels per day net during 2007. The combined Alvheim / Vilje development is estimated to contain resources of 200 million to 250 million barrels of oil equivalent gross.

FPSO DEVELOPMENT

The field will be developed by an FPSO converted from the multipurpose shuttle tanker (MST) Odin, for which the Alvheim group signed a purchase and sale agreement with Statoil. Gas export will use the existing UK SAGE system with a new 14in, 24-mile cross border pipeline. Produced water will be reinjected.

Odin has an overall length of 252.16m or 233m between perpendiculars as well as a 42m moulded breadth and a 23.2m moulded depth. Its design draught is 15m and it has an 85,300t design deadweight.

The tank arrangement consists of one centre tank and two wing tanks. There are 18 cargo tanks enclosed by 25 L-type ballast tanks. The current storage capacity of 530,000 barrels of oil will increase to 560,000 after vessel modifications are complete.

The port and starboard engine rooms contain two MAN-B&W 8L 48/60 engines, each providing 8,400kW at 514rpm. The aft port and starboard engine rooms also contain a MAN-B&W 12V 32/40 engine, giving an output of 5,280kW at 720rpm.

APL signed a contract with Marathon for the turret mooring system for the Alvheim FPSO - the largest in APL's history with a contract value in excess of NOK 400 million. APL will supply an STP system for permanent mooring of the MST Odin as FPSO for the field lifetime of 25 years. The STP system will have 14 slots through the turret to accommodate risers and umbilicals for the initial subsea wells and for planned expansions.

It will be passively moored by 12 lines in an arrangement designed to withstand a 100-year storm with 14.6m significant wave height.

Marathon awarded Technip the EPCI (engineering, procurement, construction, installation and commissioning) contract, worth approximately €130 million, for the installation of the subsea system. The contract includes design and supply of all line pipes, flexible pipes, umbilicals, riser bases and manifolds. The installation work is scheduled to take place during summer 2006.

Technip Offshore Norge will perform the project management and engineering. The flowlines will be fabricated in either Evanton or Orkanger. The flexible risers and umbilicals will be manufactured at Technip's facilities in Le Trait, France, and Newcastle, UK, respectively.

Several vessels from Technip's fleet will undertake the offshore operations: Apache for pipe lay, Deep Pioneer for structure installation and Wellservicer for spool installation and tie-ins.