Critical issues:

• Snøhvit embraces the first export facility for liquefied natural gas (LNG) in Norway and Europe
• With initial cost estimates of NOK 45 billion overall, Snøhvit is the largest ever industrial project in northern Norway’s Finnmark county
• Huge volumes of gas deep beneath the Barents Sea will be piped ashore, liquefied through cooling and shipped by special carrier to Spain and the USA
• Shipment starts in 2006, and will continue for more than 20 years
• Demanding fabrication processes represent a major challenge for the Snøhvit development
• The onshore facility is due to come on line at the same time as production begins from the Barents Sea field in 2006
• Delays, lower production rate, cost overruns and increase in operating costs may significantly reduce the income potential and the return on the investment

Solutions:

• We developed an integrated investment-at-risk model to quantitatively assess the economical and time related consequences associated with the different uncertainty factors along the value chain
• Economical indicators were calculated pre and post tax as relevant

Value delivered:

• Critical risks were identified, increasing our clients understanding of schedule, cost, reservoir and technology uncertainties and their influence on the indicators net present value (NPV), internal rate of return (IRR), pay back period, break even product price and time-of-first-gas (TOFG)
• This allowed focused follow-up of the critical factors throughout the project execution phase