December 24, 2025 [Oil Price]- Equinor has revised both the timeline and budget for its Snøhvit Future project in northern Norway, with onshore compression now expected to start in 2029, one year later than originally planned, and total project costs exceeding NOK 20 billion in 2025 terms.

The update, released on December 22, confirms that estimated costs have increased by roughly NOK 4 billion since 2024. When the plan for development and operation (PDO) was submitted in 2022, the project carried an initial estimate of NOK 13.2 billion, equivalent to about NOK 14.7 billion when adjusted for inflation.

Snøhvit Future is designed to extend plateau production at Hammerfest LNG as reservoir pressure declines and to significantly reduce emissions through electrification. Once completed, electrification of the Melkøya LNG facility is expected to cut annual CO? emissions by around 850,000 tonnes—roughly 2% of Norway’s total annual emissions – making it one of the country’s largest single decarbonization projects.

Equinor said the project is now approximately halfway completed but acknowledged that execution has proven more demanding than anticipated. According to Trond Bokn, Equinor’s senior vice president for project development, the company underestimated the complexity of carrying out a large-scale development project at an operating LNG plant.

“In addition to the extensive turnaround at Melkøya this year, we have had temporary safety-related shutdowns that have affected progress,” Bokn said. Harsh winter weather during 2024-2025 also limited construction activity in parts of the facility, while an extended turnaround in summer 2025 delayed the resumption of project work.

The company also pointed to higher engineering costs linked to more complex integration with existing infrastructure, as well as elevated equipment prices driven by persistent inflationary pressures across global supply chains.

Despite the setback, Equinor emphasized the strategic importance of Snøhvit Future for Norway’s gas exports and regional economic activity. The project underpins long-term gas supply from the Barents Sea to Europe toward mid-century, while supporting employment and industrial activity in Hammerfest and across northern Norway.

During the development phase, Equinor expects around 70% of total value creation to go to Norwegian companies, with more than one-third flowing specifically to firms in northern Norway. The project has been positioned as a key pillar of Norway’s strategy to maintain gas production while lowering upstream emissions.

Snøhvit Future’s cost revisions were not included in Norway’s most recent national budget reporting cycle, as estimates were still being finalized at the time. However, the government had previously been informed that overall investment levels would increase.

The Snøhvit field ownership group consists of Equinor Energy AS (36.79%), state-owned Petoro AS (30%), TotalEnergies EP Norge AS (18.4%), Vår Energi ASA (12%), and Harbour Energy Norge AS (2.81%).

The delay adds to broader challenges facing Arctic and brownfield LNG developments, where cost inflation, operational complexity, and decarbonization requirements are increasingly shaping project economics. Still, Equinor maintains that Snøhvit Future remains central to delivering low-emissions Norwegian gas into the 2030s and beyond.