OIL giant BP has dropped its plans to build a £500 million gas sweetening plant at Sullom Voe oil terminal in Shetland.
The decision comes as a further blow to the local economy, which had expected to see 500 construction jobs created over three years along with 33 full time posts once the plant became fully operational.
In March the multinational announced that it had put the project on hold following the recent collapse in the price of oil.
BP have reconfigured their approach to the North Sea province since the drop in prices, but insisted last week they were fully committed to the west of Shetland region with the positioning of the FPSO Glen Lyon at Schiehallion and the final installation of the Clair Ridge production rig.
On Thursday a BP spokeswoman said the company also remains fully committed to Sullom Voe terminal to ensure it has “the necessary facilities to reliably support long-term oil and gas production from fields to the west and east of Shetland”.
She added that BP now believe there are cheaper ways of processing gas from west of Shetland using existing facilities rather than building new.
“Given the current business climate and as a result of revised west of Shetland sour gas production modelling work, the Sullom Voe Gas Sweetening (SVGS) partners have concluded that a more cost-effective solution to meeting future gas sweetening needs for the region is possible,” she said.
“Consequently the revised SVGS project will focus on enhancing (and potentially expanding) the gas sweetening capability of the existing plant at SVT and maintaining the existing offshore sour gas “scavenging” capability on Clair and Schiehallion.
“Construction of the originally envisaged new SVGS plant at SVT will not now proceed.”
Local councillor Alastair Cooper said he was not surprised by the decision, but remained concerned that Shetland was losing out on significant employment opportunities.
“The fact that this is not coming to Shetland will have an impact on local contractors,” he said.
“Given the pundits saying the price of oil is likely to stay as it is, I suspect there will be further job losses and further cuts, which will not be pleasant.”
Become a supporter of Shetland News
Shetland News is asking its many readers to consider start paying for their dose of the latest local news delivered straight to their PC, tablet or mobile phone.
Journalism comes at a price and because that price is not being paid in today’s rapidly changing media world, most publishers - national and local - struggle financially despite very healthy audience figures.
Most online publishers have started charging for access to their websites, others have chosen a different route. Shetland News currently has over 540 supporters who are all making small voluntary financial contributions. All funds go towards covering our cost and improving the service further.
Your contribution will ensure Shetland News can: -
- Bring you the headlines as they happen;
- Stay editorially independent;
- Give a voice to the community;
- Grow site traffic further;
- Research and publish more in-depth news, including more Shetland Lives features.
If you appreciate what we do and feel strongly about impartial local journalism, then please become a supporter of Shetland News by either making a single payment or monthly subscription.
Support us from as little as £3 per month – it only takes a minute to sign up. Thank you.Support Shetland News