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Energy / Negotiations to open on new terms for long-term export of Clair oil to Sullom Voe

Sullom Voe Terminal. Photo: BP
Sullom Voe Terminal. Photo: BP

OIL from the Clair field west of Shetland is set to continue to be exported into Sullom Voe for the time being – potentially bringing a vital boost to the longevity of the terminal.

Negotiations are now due to take place over new commercial terms of the long-term export of Clair oil into the terminal.

However, it is understood that if terms are not agreed then the owners of the Clair field have the right to revisit alternative export solutions.

It was revealed in 2019 that negotiations were taking place between Clair field operator BP and Sullom Voe Terminal operator EnQuest over the terms of the export of oil, which runs into the terminal through a pipeline.

BP had confirmed it was “evaluating alternative technical options” for the export of the oil, leading to concerns that Sullom Voe Terminal could have to close with the loss of hundreds of jobs as soon as 2025 if the oil was to bypass Shetland.

Oil from the Clair has been exported to the terminal since 2005, and production from the field is expected to continue for a number of decades.

The focus has previously been on BP and those involved in the Clair field reviewing options of how to export the oil in the future, but they have now signalled their intent to enter talks with EnQuest on terms of long-term export.

A spokesperson for BP said on Friday: “BP and the Clair field partners can confirm they are to proceed with non-exclusive negotiations with the Sullom Voe Terminal (SVT) owners on reaching new commercial terms for the export of oil from the Clair field.”

A spokesperson for EnQuest said the terminal operator “welcomes confirmation the terminal has been asked to continue negotiations with BP for the long-term export solution for the Clair development”.

“We look forward to continuing to work with the Clair JV partners over the coming months,” they added.

“SVT owners remain committed to sustainably transforming the terminal to provide long-term commercially attractive solutions whilst minimising our environmental impact.”

Shetland Islands Council earns between £6 and £8 million every year from operating the port of Sullom Voe, money that goes into its reserve fund and is used to finance vital services in the community.

Chairman of the council’s development committee, councillor Alastair Cooper, said the “uncertainty continues until such time as the contract is signed”.

“That could be a bit away,” he added. “I would like to see it concluded and we could move ahead.”