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Equinor (EQNR) Awards SURF EPCI Contract for Troll Gas Project

Zacks Equity Research
·3-min read

Equinor ASA EQNR has awarded Ocean Installer an engineering, procurement, construction and installation (EPCI) contract for subsea umbilicals, risers and flowlines (SURF) as part of the second stage of the Troll Phase 3 gas development project offshore Norway.

The contract, valued at more than $95 million (NOK 1 billion), encompasses significant fabrication work and extensive offshore operations set to span three years, with the initial campaign set to commence in 2025.

The contract follows Equinor and its partners’ decision to invest more than $1.13 billion (NOK 12 billion) to advance the gas infrastructure in the Troll West gas prospect. Equinor holds a 30.58% operating interest in the Troll gas field.

Stage 2 of the Troll Phase 3 project includes drilling eight new wells from two new templates, with subsea controls extended from existing templates. A new 36-inch gas flowline will be installed as a tie-back to the Troll A platform and modification work will be conducted on Troll A.

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In addition to the SURF EPCI contract, Ocean Installer has secured a separate contract to replace a 4-kilometer, 10-inch flexible flowline at the Troll B field, scheduled for 2025.

Ocean Installer’s EPCI contract includes the fabrication and installation of four large pipeline termination structures for the 36-inch gas flowline, five 20-inch spools, a subsea pig launcher and receiver, 6 km of 4.5-inch MEG Line, and protective covers.

Additionally, the work covers the installation of the subsea production system and umbilicals from OneSubsea, as well as trenching and pre-commissioning activities. Engineering work is already underway from Ocean Installer’s offices in Stavanger and Oslo, with the majority of fabrication set to be awarded to Norwegian subcontractors.

The Troll gas field currently produces at a plateau rate of 129 million standard cubic meters of gas per day, following upgrades at the Kollsnes processing plant. The new Troll wells are expected to add approximately 20 million standard cubic meters of gas per day to production.

The new infrastructure will accelerate reservoir production equivalent to around 55 billion standard cubic meters of gas, with an annual peak contribution of about 7 billion standard cubic meters of gas from the new development.

Zacks Rank & Key Picks

Currently, EQNR carries a Zacks Rank #3 (Hold).

Investors interested in the energy sector may look at some better-ranked stocks like Archrock Inc. AROC, Sunoco LP SUN and GeoPark Ltd. GPRK, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Archrock is an energy infrastructure company based in the United States, focusing on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.

The Zacks Consensus Estimate for AROC’s 2024 and 2025 EPS is pegged at $1.07 and $1.23, respectively. The company has a Zacks Style Score of A for Growth. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.

Sunoco is a leading wholesale motor fuel distributor in the United States, boasting a vast distribution network spanning 40 states. With long-term contracts servicing more than 10,000 convenience stores, it distributes above 10 fuel brands, ensuring a stable revenue stream. SUN currently has a Value and Growth Score of A.

The Zacks Consensus Estimate for SUN’s 2024 and 2025 earnings per unit is pegged at $7.29 and $7.17, respectively. The partnership has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.

GeoPark, based in Hamilton, Bermuda, is an explorer, operator and consolidator in the oil and gas sector. The company primarily operates in Chile, Colombia, Brazil and Argentina.

The Zacks Consensus Estimate for 2024 and 2025 earnings per unit is pegged at $3.23 and $3.98, respectively. The company has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.

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Sunoco LP (SUN) : Free Stock Analysis Report

Geopark Ltd (GPRK) : Free Stock Analysis Report

Archrock, Inc. (AROC) : Free Stock Analysis Report

Equinor ASA (EQNR) : Free Stock Analysis Report

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Zacks Investment Research