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Norwegian oil major Statoil ASA (STO - Analyst Report) has awarded the contract for building the world’s largest Spar platform for the Aasta Hansteen development, off Norway, to the consortium of French engineering giant Technip and South Korea's Hyundai Heavy Industries (“HHI”).

Per the initial projections, total recoverable reserves for Aasta Hansteen, earlier known as Luva, is 47 billion standard cubic meters (scm) of gas and 0.8 billion scm of condensate.

The spar will be constructed in the shipyard of South Korea and is scheduled to be delivered in the middle of December 2015, on the world's biggest heavy-lift carrier. The work on the spar is likely to begin by mid-August 2012.

The spar would be the first of its kind in the Norwegian Continental Shelf equipped with adequate storage capacity. With the capability to store around 25,000 scm of condensate, the spar will deliver gas through the Norwegian Sea Gas Infrastructure.

Technip is responsible for the designing, procurement and supply of the Spar platform, which has been prepared to assist platform topsides in Norway. The French engineering giant is also accountable for designing as well as specification planning of the steel rigid risers and a complete mooring system. Aker Solutions has obtained the FEED facility for the project.

The total contract value for the spar, mooring systems and steel risers are estimated to be above NOK 4 billion ($656.95 million), with the first yield expected towards the end of 2016. The letter of intent will aid in designing the overall progress plan for Aasta Hansteen.

The remaining contracts for the topsides, subsea facilities, pipelines, marine operations and drilling relating to the project will be awarded during autumn 2012 and spring 2013.

The production life of the field stretches till 2040. The field lies in Production License 218, operated by Statoil. The other partners in the license are ExxonMobil Corporation (XOM - Analyst Report) and ConocoPhillips (COP - Analyst Report).

Statoil holds a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. Longer term, we maintain a Neutral recommendation on the stock.


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