THE OPERATOR of Sullom Voe oil terminal says it is on track to cut operating costs at the facility by £50 million in the space of just one year.
A half-year report published by EnQuest on Friday revealed that it is set to reduce operating costs from £200 million in 2017 to around £150 million this year.
Further savings are planned for 2019 as the company continues to explore more cost-efficiencies at the ageing terminal.
It said the savings have partly been found through using different suppliers to get better costs, and reducing the number of concurrent activities on site.
EnQuest also confirmed that it is upping its stake in the terminal from three per cent to 15.1 per cent.
It forms part of a deal which will see it acquire the remaining 75 per cent of the Magnus field - located 100 miles north east of Shetland - from BP.
The company took over the running of Sullom Voe Terminal from BP in December and it quickly set about making the facility as "fit for purpose as possible".
It says it specialises in turning "opportunities into value" by targeting maturing assets like the terminal.
In its half-year report, EnQuest said the Sullom Voe savings are being "achieved while also delivering a strong safety performance, which remains the top priority, and high levels of site availability".
"They have been driven by the application of an asset business model at the terminal, focused supply chain management including utilising the group's increased scale, efficient project delivery through the reduction in the number of projects and concurrent activities and simplifying and improving utilisation of the resources on site," it continued.
An EnQuest spokesperson said: "EnQuest has continued to progress a programme of work to ensure the terminal is fit for purpose, which includes maintenance and renewal investment as well as some decommissioning activities.
"We are working with our service providers to optimise work programmes and cost efficiencies. We are continuing to develop our longer-term plans for the terminal with the aim of maximising its long-term value. With a significant proportion of EnQuest’s oil production flowing through the terminal, it is an essential part of our portfolio as well as being of strategic importance to the UKCS."
The news comes ahead of a large showcase event in Shetland on Monday where the energy sector, supply chain and politicians will discuss the vision for Shetland as an industrial and energy hub.
Hosted by Oil & Gas Authority and Highlands & Islands Enterprise, the event will also feature a visit from Scottish minister for energy Paul Wheelhouse.
Over 100 delegates are expected to attend the event to discuss how new growth opportunities can be embraced in the industry.
They will visit Sullom Voe, Dales Voe and Lerwick Harbour during the day in addition to hearing presentations.