Subsea 7 & Granherne to Provide FEED Offshore Norway

Centrica has entered into long-term partnership agreements with three suppliers. The agreements are based on a strategic partner alliance (SPA) model covering all phases of project execution, with duration of up to ten years. The first call-off will be for Front End Engineering and Design (FEED) for the Butch development in the North Sea.

The SPAs have been entered into with Aibel, Subsea 7, and DNV GL. The objective is to establish a long-term relationship between Centrica and the suppliers, to create value and predictability.

“Centrica is about to embark on its first operated field development in the North Sea, the Butch field. We want to build expertise and capacity over time. This is why we are entering SPA agreements with strong suppliers, who have extensive experience with field developments on the Norwegian continental shelf,” says Vice President Projects Arne Bjorlo of Centrica.

One important goal is for this contract model to provide Centrica’s partners with the opportunity to continually contribute their best solutions and project expertise through the study and execution phases.

First challenge: Butch

Centrica and the partner oil companies in the Butch licence will invest between NOK 6 and 7 billion to develop the North Sea field. Aibel will deliver design, engineering and fabrication, Subsea 7 will provide pipelines, umbilicals and subsea service, while DNV GL will verify the work done.

“We have carried out a thorough and timely process, both to identify the various partners, and to clarify how we will implement the SPAs – a model I think will be attractive for all parties,” says Bjorlo.

SPA model strategy

The strategy behind the SPAs with selected suppliers is based on shared values and goals. Centrica sees several advantages to the SPA agreements:

- Early engagement to secure optimal use of the supplier’s experience and technical solutions
- Increased standardisation to reduce cost and project complexity
- Optimised interfaces and improved project execution

The agreements have duration of five years, with an option of an additional five years.