Framo Engineering has won a contract worth Nkr900mn ($156m) from Statoil to design and construct the Gullfaks subsea gas compression system in the Norwegian North Sea.

The compression facility will be located in the southern part of the field, about 15km from the Gullfaks C platform.

Statoil senior vice president for technology Siri Espedal Kindem said subsea gas compression represents an important leap forward in the efforts to improve recovery and extend the production life of several gas fields.

"Having implemented this technology, we are also one step closer to our ambition of moving processing facilities down on the seabed," he said. "In other words: a subsea factory."

Framo will carry out design and construction of the plant under an engineering, procurement and construction contract, after earlier being awarded a technology development contract in 2009.

The company said that the current recovery rate at the field is 62%, but a combination of subsea compression and conventional low-pressure production in a later phase of the project may increase this to 74%.

Statoil head of North Sea West operations Jannicke Nilsson said subsea compression is one of the company’s main initiatives to enhance production from existing fields on the Norwegian continental shelf.

"This may increase the production from the field by 3 billion cubic meters of gas, enabling Gullfaks to sustain plateau production for gas export," said Nilsson.

Work on the contract will start immediately and runs until November 2015.