Fewer tankers pay more to use Sullom Voe

Shetland Islands Council is confident to recoup losses made through operating its Sullom Voe oil port after hiking up tanker charges by 83 per cent.

The council’s harbour board heard on Wednesday that due to the slump in the oil and gas sector as well as the extended shutdown of the Clair field platform the Sella Ness port was to make losses of £3 million on its Sullom Voe account in the current financial year.

However, following negotiations with the oil industry, finance chief Jonathan Belford said he was confident the fortunes of the harbour could be turned around and now projects a surplus of £7.5 million for 2016/17.

“We have had updated information on the expected number of tankers calling at the port and the consequence of that is a higher charge.

“It is a substantial increase but it reflects the service that we are asked to provide. What we then added on is the extra cost in order to recover the loss that we are making in this financial year.

“BP understands the situation that we are in in terms of the way we are constructing our charges, but also what we need to generate in order to support the extra services we deliver as a local authority,” Belford said.

The council also had to reduce its income projections from the Shetland Gas Plant, which is expected to be commissioned in December.

Bedford said he hoped to generate some income for the council in the final quarter of 2015/16, but this would only be in the region of £250,000.

Meanwhile, the council expects to earn just £693,000 from the gas plant in 2016/17, a fraction of the initially floated figure of around £3 million per annum.

Belford said the new figures were more “realistic” as they were taking into account the reduction in oil and gas prices. It will also take some time for the Shetland Gas Plant to operate at full capacity, he said.

Harbour charges for all other council pier users have meanwhile been increased by three per cent.