SULLOM VOE Terminal needs “massive simplification” over the next two to three years, a BP executive has suggested at the Offshore Europe conference held in Aberdeen.
The company’s regional president Ariel Flores, told industry specialist S&P Global Platts that a decision whether to continue using the terminal to export oil from the massive Clair field is expected to be made by the end of the year.
Shetland News revealed in May this year [Alarm bells ring as BP and EnQuest renegotiate Clair oil export; SN, 16 May 2019] that the company was locked in negotiations with new terminal operator EnQuest over the terms of continuing to use the facility for exporting Clair oil.
The consequence of losing the Clair oil contract to offshore loading could potentially be devastating for the terminal and the Shetland economy.
BP sold the terminal to EnQuest at the end on 2017. EnQuest said on Friday it did not wish to comment on Flores’ remarks.
According to S&P Global Platts, the BP senior manager said one option to modify the terminal would be to enable it to handle larger tankers to better access global markets.
“You have to reduce the complexity of that terminal. It does not require what we built for a million barrels [a day] many decades ago. There are capital projects that allow you to decommission and provide a terminal that’s fit for the future,” Flores is quoted.
“How can you provide for larger vessels is a theme — [VLCCs] become a massive enabler for you to tap into the global market. The smaller you get, the more constrained you are relative to customers.
“It might not necessarily be a VLCC — you’ve got to kind of work the optimum, given your current state. There’s a facet of evaluation that has to explore that, and requires investment.”
In a results statement on Thursday, EnQuest said: “EnQuest has continued to achieve high plant availability and deliver safe and stable operations at the Sullom Voe Terminal.
“In July, the group announced essential organisational changes [Eighty jobs to go at terminal; SN, 3 July 2019] to ensure the terminal remains competitive for existing and future business, to deliver the required level of service to its customers, to help Maximise Economic Recovery in the UKCS and provide long term employment opportunities.”