Gas plant nine months behind schedule

OIL company Total has finally admitted that its £800 million Shetland Gas Plant will not be completed in 2014.

A company spokesman claimed that completion of the gas treatment plant was anticipated during the first three months of the 2015, around nine months behind schedule.

During Wednesday’s budget setting meeting of Shetland Islands Council it emerged that the local authority only expects to start receiving throughput levy/rent payment in the third quarter of next year.

The council hopes to earn between £2 and £3 million annually from the gas plant, but estimates an income of just £1.35 million in 2015/16.

Following months of denial, and a profit warning from main contractor Petrofac last month, Total issued a short statement on Thursday.

It reads: “Total and its main contractor Petrofac have been working to finish off the construction of the Shetland Gas Plant, which is now anticipated to be completed early in 2015 (Q1).”

However, it is unclear whether the company is referring to the handover from contractor to operator, or whether first gas is expected during the first quarter.

The offshore infrastructure between the onshore plant and the Laggan-Tormore gas reservoirs to the west of Shetland is all in place and ready to go, according to the company spokesman.

The almost four year construction work on the massive gas plant has been plagued with weather related-delays and other hitches, leading to rising costs. A final figure for the Shetland Gas Plant is not available.

On Wednesday, the council’s outgoing finance chief James Gray said he didn’t know when the gas plant would come on stream, and a cautious approach to budgeting was the prudent thing to do.

Gray said: “It wouldn’t be appropriate for us to be commenting as to when Total is opening their gas plant.

“We just took a view to estimate six months of income. If we get more, and we hope we do, it would be a bonus. We just tried to be cautious.”